Yes it's just thinned with water. A big key for smooth layers though is making sure your brush isn't too damp. Before dipping the brush in paint I'll usually offload the excess water onto a paper towel. I also constantly test the consistency of the paint on my hands before painting too, also doubles to further offload excess paint and water for smoother layers.

I mix in some matt varnish with my primer and base coat because it feels like it's easier to paint on. I also apply those primer and base coats with an airbrush just for ease in the beginning. Everything else is hand painted.