Hunger and thirst will affect your character in several ways. First, if you are hungry or thirsty it will become harder to regain your vitality or recover from exhaustion. Skills are available to be learned which will enable your character to find food and water in wilderness areas, while many shops sell different kinds of food and drink in cities and towns. Be careful when drinking from you local tavern... While much interesting information can be gleaned from the bartenders and other patrons, if you drink too much you may find that your perception of how you are faring in combat differs considerably from reality.
Food can be purchased in various forms. Different items have different food values. You will have to experiment to find out which items give you the best value for your money. You may also find that similar items from different shops have different values, so the steak purchased at a fine establishment may prove more filling than one bought from a roadside grill (or perhaps vice versa).
Liquids are kept in containers. The most common liquid is water, and it is available for free at most villages and cities from public fountains. Simply fill skin fountain to fill your water skin from the public fountain and voila! you are set to go. Different container hold various amounts of liquid, but be careful how much you carry, as water can be very heavy.