Wikipedia
Aquavit or okovita (Latin: aqua vitae, "water of life") has two meanings. It is an old name for vodka, and it can also be a strong alcoholic beverage, usually around 70-80% alcohol, of very low quality. It was usually unclear, as it was distilled with alcohol content and cheap price in mind, with little regard to taste.
It is likely that the name vodka (from voda (or woda), "water") stems from the difference between high-quality clear (and thus water-like in appearance) products and the lower-class stronger okovita. Also, the former was preferred by upper classes of the society, while peasants wanted strong intoxication for the lowest price possible.
As better distillation techniques became widespread, the cost difference between poor-quality okovita and clear drinks became smaller, and thus both the drink and the term have fallen out of use.