This study investigates the accuracy of long-term water demand projections and tracks the evolution of water demand management incentives across 61 California water suppliers from 2000 to 2020. Through a systematic analysis of Urban Water Management Plans, we find that water suppliers consistently overestimated future demand by an average of 25% for 5-year projections and 74% for 20-year projections. This overestimation stems primarily from assumptions about per capita water demand rather than population growth estimates. While suppliers generally projected stable or increasing per capita demand, actual water demand per capita declined by 1.9% annually between 2000 and 2020, leading to a decoupling of water demand from population growth.