This is a simple experiment illustrating the properties of materials. Paper is essentially wood pulp ground up and dried. There are many materials whose basic properties change when they come into contact with water, think how your skin shrivels up in the bath, and wood is one of them. The fibers of the paper (wood) swell when the come into contact with water and the paper seems to magically open. What you are really watching is the material absorb water and expand.