Hello John,
The islands in Greece do not have the plumbing system of the mainland cities. Flushing the paper is really forbiden by the hotels and other accommodations for the reason that it can destroy all the plumbing system. So you need to use the bins.
Concerning the water, it is usually advised to never drink the water and to use bottled ones. Some people can drink it but if you are used to the citie's water system it is preferable to avoid it. Drinking the local water in Paros, Santorini, Paros etc won't send you to the hospital but depending of the people, you can at worst spend a day in your room on the "king's chair"
