Sustainable water resource management requires establishing a balance in the water balance equation to achieve sustainable development goals. The study aims to examine the application of uncertainty and reliability of affecting indicators on water resource carrying capacity (WRCC) in the Qarnqou watershed using a combination of grey theory, entropy, and Z-numbers. A system dynamics (SD) model was developed to investigate feedback among the environmental, economic, and social subsystems. Ten indicators affecting WRCC were identified from the SD model, some of the indicators had a positive nature while others were inversely related. Identified indicators were weighted using a combination of Z-numbers in grey theory and entropy. Subsequently, WRCC values for the period 2000-2020 were extracted, and linguistic variables were applied to the obtained values. Results indicate a change in the WRCC status of the watershed from a poor (P) state in 2000 to a good (G) state in 2020, and in recent years, this good (G) status has been associated with fairly (F) reliability. To rank the indicators affecting WRCC, the Z-TOPSIS method was employed. The results show that the population indicator achieved the first rank, followed by environmental indicators such as agricultural land and evapotranspiration catch second and third ranks. The ranking obtained from the Z-TOPSIS method for the indicators is more consistent with the concept of WRCC. This study highlights the importance of integrating reliability and uncertainty based on linguistic variables in water resource assessments and enhances the innovative use of Z-numbers and grey entropy in managing water issues.