This article analyzed the story of Shui-hu through the description of Jiang-hu, the folkway, the changes of events as well as the action of escaping from the chaos world. It has become a representational and mobile worldview that involves multi-facet and multi-dimensional imagination of space. From the description of the huge swamp area in the early novel of “Liang-shan bo,” not only “the space” concept of Liang-shan bo has been connecting spirits from generation to generation, it also becomes “a place” where creativity seems never end. The phrase “shui-hu” originated from the folktale of volunteer army and the dialogue of the knowledgeable people after a long period of discussion. It had achieved a well-sound position that the smaller viewpoint of Jiang-hu was replaced by a much greater perspective of Jiang-shan (nation). This article points out how the book of Shui-hu-hou-zhuan describes the changes of Liang-shan-bo from war ruins, memorial site, family shrine, and how it becomes the center belief of the nation. Besides these, the meaning of Shui-hu has also implies a hiding place where people can find peace of mind. Furthermore, the remnants of shui-hu finally pursue their utmost peace by sailing to a far away island. The development of the story representes the change of shui-hu, from it resistance conquer, and from it conquer to escape. It also implies that how the possibility of an “outlier” organization moves from triviality to become the focal point of the society as well as the nation, and later, a brand new nation emerged as a result of this idea.