Pounder... How do you plan to prevent the Waterfall "Units" from being destroyed? If another Unit attacks them, it would seem a bit strange.
You could have another Unit animated with the Waterfall to only pop out when attacked. This unit would have high Hit Points so it would not die easily. The animation would show the Waterfall flowing in all animations, including behind the Defending unit when attacked. The added Defending Unit would be seen when the Falls were attacked. When the Defending Unit dies, the Falls would "Dry Up" and Vanish, leaving the Mountain terrain as it normally looks in the game without a Waterfall.
This type of "Unit" was named a "City Unit" long ago when Cities were pre-placed on the map and animated with a Defending Unit that Popped Out when it was attacked just as this appears in Normal Cities. The animation showed the Defending unit die first then the City deteriorating until gone, revealing the underlying terrain and usually a Special Resource that was pre-placed on the same tile before the "City Unit" . The Death animation was long (30 Frames) to have the Defending unit die first then the City deteriorate in order to make these "Cities" appear as all other Cities...worked very well. These "City Units" were mainly wanted to offer more CIVs on large Maps. Naturally, these CIV were Not playable but added more to Conquer as well as provide the ability to add Hidden Resources that would be revealed when the "City Unit" was destroyed.
I made many of them years ago including all four Eras that showed the different Buildings and Units for a Guy who was working on a Scenario but he did not complete it due to going away for school.
The most difficult area was adding the Defending Unit because they cannot have any shadows where the shadows would overlap the Cities due to the shadows would wipe out the Cities in those areas and only the translucent shadows would be seen. I removed shadows only where they overlapped the Cities and kept them where they hit the Ground and this worked well.
...Waterfalls could have some sort of "Monster" as the defending unit for example in order that the defending unit appear as not belonging to any CIV.
Many possibilities with this type of unit, including a Statue Fountain that appears as a Land Mark, Various Buildings, Structures, etc... They would be attacked in War and destroyed, all of which can be animated to look Great in the game.
One more Point... as a Unit the "City Units" such as the Waterfall, will have a Health Bar that will show.
Simple Example of a "City Unit":