It is exactly what I said, spores of a bacterial disease that affects grubs.
It is sold as milky spore powder in any garden store, including the big box ones:
https://www.homedepot.com/p/Milky-Spore- ... fj0-0bAiZY
It is great stuff, because multiplies in your soil, so does not have to be reapplied.
Here's more info about it:
https://web.extension.illinois.edu/blmp/ ... 27553.html
Don't stop watering... your grass roots are being eaten, so it needs more water, not less to make up for less root system to absorb water. But I would stop fertilizing. While your grass is struggling, fertilizer is just another stress. It forces leaf growth that the plant doesn't have the root system to support.