Just as in Clay Pot cooking (with is most notable for creating tender and juicy moist foods cooked evenly and rapidly), when you cook in a wok using the wok lid to create a covered cooking space as part of the cooking process, you are enabling the wok ingredients to steam cook. The creation and maintenance of this hot steam environment in the wok is an important aspect of how you cook in a wok - and an important part of wok cooking to make it quick and healthy.
Important: this is steam cooking - not stewing
By using the wok lid appropriately as part of how you cook in a wok, you capture the hot vapors (water steam) coming off the wok ingredients as they cook. That hot steam cooks the ingredients more than the actual heat of the walls of the wok itself. You want to keep just enough water vapor in the covered wok to facilitate this process. You don't want a soupy puddle of water in the wok.