Waterworld is a campaign setting designed to work with the Fallout Pencil and Paper Roleplaying Game system by Jason Mical, adapted from the computer-based SPECIAL system designed by Interplay.
Although it uses the same system (with some slight modifications), the setting isn't anywhere near the familiar, Interplay-created "retro-future" of the computer games, or the original core rules - so forget places like Vault City and the Great Wastes.
In fact, the Waterworld "world" is a different Earth altogether; if you have to rationalize it and work it in with "canon" Fallout locations, just think
that Waterworld is on an Earth in one of an infinite number of parallel dimensions.
Waterworld takes place in the distant future: at least the year 3100 AD, if not farther. Global warming, and perhaps other factors like a nuclear war, have melted the Earth's icecaps.
The entire planet is one vast ocean, unending and harsh. Humanity managed to survive, but exists in small, isolated communities that dot the surface of the planet. The oceans are populated with strange, new creatures, the product of evolution's encouraging hand - natural or otherwise.