An investigation on the water consumption of gardens at the Mogao Grottoes indicates that the average amount of total water irrigation 8366 mm has been dissipated through evaporation of soil surface and transpiration of plants, in which the water consumption is much higher than 2250 mm of irrigation for farmland and 2486mm of local dissipation based on the water surface. This phenomenon shows a paradox: There is much more water consumption, there will be more shortage of water. The comparative research with Penman’s Evapotranspiration Index, Thornthwaite’s Evapotranspiration Index, and Holdridge’s Life Zone System can not explain this phenomenon at the Mogao Grottoes. An intensive study and analysis of the factors associated with the water dissipation, including the temperature, daylight, humidity, wind speed, heat, soil structure, and irrigation methods, shows that this phenomenon is consistent with the theory of Dissipative Structure, which can be used to explain the paradoxical issue in the water consumption of the gardens at the Mogao Grottoes. The application of the Dissipative Structure Theory is of great importance for the effective utilization of water resources in the Northwest arid area. A practical model of water dissipation can be set up based on this theory. Finally the paper discussed the concept of entropy related to the Dissipative Structure Theory, and pointed out that the entropy has no material substance, and just like the problem of time, it is only a psychological illusion of man, the main body of understanding.