Firstly, when the rain falls, the dam is full for a period of time. How the rainwater is reused.

The picture illustrates the use of rainwater for drinking and other domestic purposes. Clearly, it can be seen that the process is divided into three stages. While one stage can be recycled, other two stages is reserved.

Firstly, when the rain falls, the dam is full for a period of time. The water which is collected in the dam then is sent to water treatment plant using a pipe. The water is produced to be drinking water for household consumption.

The second is the household waste-water is used to produce drinking water. The waste-water is sent to the waste-water treatment plant. When the waste-water is purified, the excess treated water is sent to the river. The purified water is collected in the tank. Then, recycled water is sent back to the houses.

Finally, when the rain falls into the roof and water tank, the water is stored in the tank. The water which is collected in the tank then is sent to the garden. The storm-water is sent to the river via drain.

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  RainWater
  

The water is produced to be drinking water for household consumption.

Produced seems out of place here.

'The second is the household waste-water is used to produce drinking water.'

The transition into this para seems weird. You said firstly and finally and hence this para should be started with 'secondly'. But I rather see a new sentence here.

'The water which is collected in the tank then is sent to the garden'

It must be '...is then sent to..'

Hello,

Overall, I agree with the previous commentator. Let me just add a few suggestions for your writing.

While one stage can be recycled, other two stages isare reserved.

The water is produced to be drinking water for household consumption.
As the previous comment show, "produced" is out of place. Instead, you can write purified / processed / refined

Finally, when the rain falls intoon the roof and in water tank, the water is stored in the tank.

In general, I think that you are in the right direction toward organizing your essay well. You divided the process into three clear parts. However, you should work on smooth transitioning. I don't think such transitions as "firstly" and "finally" are appropriate here, because here you describe three alternative processes that are independent from each other.

Good luck!