When water freezes, the molecules slow down and assume a fixed position, although not quite in the way that one might think. Water is made of molecules with two hydrogen atoms and an oxygen atom, but those molecules don't just stop moving as units. One would think they would all stop, because the Third Law of Thermodynamics says that entropy drops with temperature, getting close to zero. However, ice does not show that property, which is one reason why ice is the only solid less dense than its liquid state.
Researchers have found that the oxygen atoms in water settle into an orderly structure with a crystalline shape but that the hydrogen atoms do not fit into a pattern. They do stop moving (after all, that's part of becoming a solid), but they do not stay with the oxygen atoms. This is one reason why the creation of ice is less efficient in terms of space. A lack of efficiency in space leads to a lower density, which is why if a glass bottle of water is put in the freezer, it will explode. The space inside the ice is larger than the space was inside the water, and it has to push through the glass.