Air is a mixture and water is a compound because:
1. Air contains different gases mixed together, which do not react to form any new compound. Whereas water is formed due to the chemical reaction between hydrogen and oxygen.
2. Air has a variable composition of its constituents, which depends on place to place. Whereas constituents of water i.e. hydrogen and oxygen are always found in a fixed ratio.
3. Air shows the properties of its constituents but the properties of water are entirely different than its constituents i.e. hydrogen and oxygen.