The children are having fun squirting each other with their waterguns in the park.

waterguns 是复合名词，由 water（水）和 guns（枪）组成。water 指"水"，guns 是 gun 的复数形式，指"枪"。waterguns 合起来指"水枪"，一种喷射水流的玩具枪。