Isabel Macdonald writes in Extra! Magazine on waterboarding:
“On May 12, 2004, a novel euphemism was delivered into the public lexicon by anonymous ‘counterintelligence official' sources cited in an online New York Times article. The piece reported the CIA had been using ‘a technique known as “water boarding,” in which a prisoner is strapped down, forcibly pushed under water and made to believe he might drown.'
“Before long, Alan Dershowitz — the Harvard law professor who advocates for a system of ‘torture warrants,' believing ‘there's no absolute right not to be tortured' — had coined a brand new catchphrase by stringing the words together into one: ‘waterboarding.' As Dershowitz himself acknowledged to Times columnist William Safire, ‘When I first used the word, nobody knew what it meant.'
“Indeed, a search of newspaper archives reveals that until May 2004, the term had actually meant an aquatic sport similar to surfing. Meanwhile, the technique now known as ‘waterboarding' — in which the person being tortured is actually drowning, aspirating fluid to the point of being unable to breathe — had previously been called ‘water torture,' or simply ‘torture,' by the media.”
I remember reading about the Chinese water torture in blood-and-thunder fiction years ago, but the term seems to have faded away. (The thing too, hopefully.) It's not in the Random House, although many “Chinese” expressions are, including Chinese fire drill, which the dictionary says is “sometimes offensive.”
In the Chinese water torture, a victim was tied down and water dripped slowly on his forehead. Over time, the drips would become excruciatingly painful and/or drive the victim insane, or so it was said.
According to various online sources, this form of torture did exist at one time, but it wasn't Chinese. It is supposed to have been conceived by one Hippolytus de Marsilis in 16th-century Italy. Then in the early 20th century, Harry Houdini came along with a trick he called the “Chinese Water Torture Cell,” in which a chained Houdini was lowered upside down into a tank of water, forced to escape or drown. He invariably chose the former. Over time, the Houdini trick and the Italian torture were mixed up together.