Typical waterspouts form by a different mechanism from tornadoes. Most tornadoes are produced by the mesocyclone of a supercell, the most powerful type of thunderstorm on earth. By contrast most waterspouts form during non-severe thunderstorms, and can even form from large cumulus clouds. So the reason they are not as strong is simply because they don't have a very strong power source compared with tornadoes.
However, sometimes a tornado produced by a supercell either forms on or moves out over water. In such a case it is called a tornadic waterspout.
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