1. Why we can see depends on the refraction, or bending, of light rays as they pass between substances of different densities. A lens works almost the same. However, the surface of lens is curved, bending rays at different angles so they are focused.
2. To focus images on the retina at the back of eye, the lens has two parts of inside and outside. When light passes from the air onto the cornea, the refraction take place in the water and cornea. So, when we open our eyes underwater, incoming light rays are hardly bent, or focused, at all.
First, there is the refraction of light rays as they pass through the water surface. Second, when you are underwater, the water will press against your eyeball, so the index of refraction changes and you can't focus on the things underwater. Third, the brownian motion of the water will also make your eyes out of focus.