The present work demonstrates a robust protocol for probing localized electronic structure in condensed-phase systems, operating in terms of a recently proposed theory for decomposing the results of Kohn-Sham density functional theory in a basis of spatially localized molecular orbitals. In an initial application to liquid, ambient water and the assessment of the solvation energy and the embedded dipole moment of H2O in solution, we find that both properties are amplified on average-in accordance with expectation-and that correlations are indeed observed to exist between them. However, the simulated solvent-induced shift to the dipole moment of water is found to be significantly dampened with respect to typical literature values. The local nature of our methodology has further allowed us to evaluate the convergence of bulk properties with respect to the extent of the underlying one-electron basis set, ranging from single-ζ to full (augmented) quadruple-ζ quality. Albeit a pilot example, our work paves the way toward future studies of local effects and defects in more complex phases, e.g., liquid mixtures and even solid-state crystals.