To phrase it in the way VCAA examiners would like to see it, the left hand side has more particles per unit volume than the right hand side. If you add water, then the overall number of particles per unit volume will decrease, so the system tries to counteract this change by increasing the number of particles, i.e. reversing the reaction to form iron(III) and thiocyanate ions.
Hi so I had a prac and it was to investigate an equilibrium mixture of Fe3+, SCN- and Fe(SCN)2+ and the equation is
Fe3+(aq) + SCN-(aq) <---> Fe(SCN)2+(aq)
In one of our test tubes, we had Fe(SCN)2+ solution and we added some water, the solution went from a dark red to a light orange colour meaning the reaction had gone backwards. Why is this?? The concentration of all species have been diluted but I don't get why the reaction goes backwards. I tried plugging in concentration values and seeing the difference in the K constant but the K constant moves to the right. Maybe I'm doing it wrong but I have no clue why!! Please help 
The K constant NEVER changes unless the temperature does. You're referring to Q, the reaction quotient, which can change and is only equal to K at equilibrium. It is calculated in a similar manner except that you use the current concentrations. As you've mentioned, Q increases, so it's larger than K and so needs to drop down to K. This means that the reaction will reverse.
I have to mention something. If you had an equilibrium with a colourless compound AB that dissociates into two species A and B and the products of the dissociation (only one of which is coloured and they may be charged or neutral) and you dilute the solution, even though the system will try to offset the equilibrium shift by producing more particles, and hence favours the dissociation, you've diluted the solution. The colour will drop. The system can only partially oppose the change. You can't dilute a solution and make the same colour more intense. Common sense will prevail here.