Water is a habitat not only for fish, but also for a lot of bacteria and plants. Similar to organisms on land, oxygen is necessary for them to survive. Fish and crustaceans have gills to absorb the oxygen for respiration. They need a minimum of 4 mg O2 per liter of H2O to survive without damage.
The capability of water to dissolve oxygen is 9.1 mg/l @ 20 °C (maximum, lower at higher temperature). But this is only a theoretical value. The actual value is lower, because of other substances dissolved in water or because fish absorb the oxygen. On the other hand it is increased by introducing oxygen through various mechanism.
The amount of dissolved oxygen is therefore a balance between absorber and donator, temperature and other substances dissolved. If this balance is seriously disturbed, one would speak of waste water