The cold sintering process (CSP) is an advanced low-temperature sintering technology whose effectiveness is closely related to the selection of transient liquid phases (TLPs). While water serves as an ideal TLP for water-soluble ceramics, most water-insoluble materials necessitate acids, bases, or specialized solvents instead. This limitation has severely restricted the application of CSP, as many water-insoluble ceramics cannot be densified due to the lack of suitable TLPs. This study demonstrates a breakthrough approach that exploits nanoscale effects to enable water to act as an effective TLP for the densification of water-insoluble Li₂TiO₃ ceramics. A comparison of nano (19.71 nm) and microscale Li₂TiO₃ powders under identical sintering conditions revealed that despite the exceptionally low aqueous solubility of Li₂TiO₃, the nanopowders achieved 94.33% relative density at only 300 °C and 700 MPa, whereas the micropowders attained only 78% density. Further analysis revealed a distinctive densification mechanism that integrates dislocation-mediated plastic deformation with localized dissolution phenomena at nanoparticle interfaces. Compared with conventional sintering (1000 °C), the resulting nanoceramics exhibited superior Vickers hardness (905 HV) and enhanced electrical conductivity while maintaining a refined nanoscale grain structure (26.42 nm). This study established an effective strategy for the cold sintering of water-insoluble ceramics with layered structures using water as a TLP, significantly expanding the applicability of CSP technology and offering new pathways for the energy-efficient fabrication of advanced functional ceramics.