The people of the Hindu Kush Himalayan region face severe seasonal water shortages due to the high variability in rainfall, and the problem is likely to be exacerbated under climate change. Small-scale local water storage options offer a means of collecting monsoon precipitation to provide for agricultural and household needs over the entire year, and they help build community resilience. Proper watershed management, with due consideration of upstream–downstream linkages, and appropriate institutional arrangements are vital for this adaptation measure to work. Active participation of local users in decisions related to water allocation and community services is essential. Planned interventions should preserve the institutional arrangements of reciprocity and cooperation among community members.