''There is no physiological reason to take water with a carbohydrate gel. However, due to the consistency of carbohydrate gels, it is advised that water is consumed to enhance the product experience.''
From the lucozade site.
So you don't actually need the water but many people find that they gag , and then feel nauseous if they try taking the gels without water. Gels have the advantage that they are more concentrated than the tablets, a lucozade gel(45g sachet) contains 30g carb which may actually be too much; a lucozade tab has only 3g carb, they are great for drip feeding but not so great if you need to take more than one for a hypo. I also find that I need to take the tablets with water when exercising otherwise I end up choking on them.
There are loads of different makes of gels each one delivers a different amount of carbs.(google sports/energy gels, there are many online shops which sell a variety)
I know of one,( high five Isogel ) which is a bit more liquid and is designed to be taken without water. It has 22g carb.(and some caffeine which is supposed to make it work quicker) I haven't tried them. I think I'd want to try it out on a hypo in a 'safe' situation first. I know of runners that like them for fueling.
As Ken says there are the alternatives designed for hypos.
Glucogel(hypostop) is quite thick (so potentially the same problem as the sports gels) and is expensive, though you may be able to get it on prescription. There is a cheaper and (in my opinion) more fluid, alternative called glucopulse. It's available here in France (distributed by Roche/Accu-chek/) at about 1E a gel (10 carbs) but it doesn't seem to have crossed the channel. (don't know if any of the online pharmacies would send to the UK)