More than 22,000 customers in Greystones and Delgany in Co Wicklow were included in the warning when it only applied to 17 properties.
Residents of the 17 homes in the Elsinore estate received a hand-delivered notice about the problem on March 15 and they remain under a do not drink notice.
Uisce Éireann said the notice was updated online on Monday night and due to a “technical error”, it incorrectly included the wider area.
The notice remained in place until mid-morning on Tuesday.
“This has now been removed and we apologise for any confusion as a result,” an Uisce Éireann spokesperson said.
Local Socical Democrats TD Jennifer Whitmore said such confusion was not satisfactory.
“I was in contact with Uisce Éireann and was told that I should go by the online notice which included the whole area until I heard otherwise,” she said.
“People need to be able to have confidence in these notices and if there’s confusion in Uisce Éireann then there’s a risk of people being unnecessarily inconvenienced or else ignoring the advice when it actually is about their area.”
Uisce Éireann said it issued the March 15 notices because of elevated levels of iron and low levels of chlorine in the water supply serving Elsinore.
In an updated notice issued today, it stressed that the water must not be consumed in any manner.
“Please note this is not a Boil Water Notice. Boiling the water will not reduce iron levels and is therefore not a suitable measure to make the water safe,” it said.
“It is especially important that mains drinking water is not given to bottle fed infants.”
Uisce Éireann operations manager, Stephen Burke said: “We appreciate the impact that this notice is having on customers.
“However, the restriction has been put in place in order to protect our consumers.
He said Uisce Éireann and Wicklow County Council were working tirelessly to lift the notice as early as it is safe to do so.”
Mr Burke stressed: “The notice is contained to a section of the network supplying 17 properties in Elsinore, Delgany and does not impact the wider supply area.”
He asked anyone with concerns, particularly for elderly or vulnerable customers, to contact Uisce Éireann on1800 278 278.”