The riverfront up and down the Jones Falls in Baltimore is littered with "mills" or factories, which are located there because they needed water power. My understanding is that real industrialization got started with things like the Arkwright water frame, and then the steam engine allowed factories to spread to more convenient locations.
Ironically, one of the first uses of coal-powered steam engines was to pump the water in ship canal locks so goods could be moved to and from water-powered factories.
I don't understand what you mean about it having been in full swing for a century before that.