Q:

Why didn't Thales say the water is principle of matter, but the originating principle, according to Russell?

If I remember Russells Short History of Western Philosophy correctly, Russell unequivocally maintains that Thales was the first philosopher of note. He said:

The world is made of water

Russell does not explain in any detail as to why he held this view, saying it was most likely he considered water as an 'originating' principle. In fact it is only in Aristotles Metaphysics that we have any evidence that Thales made this claim, and Aristotle then goes onto conjecture what he may mean by this.

That from which is everything that exists and from which it first becomes and into which it is rendered at last, its substance remaining under it, but transforming in qualities, that they say is the element and principle of things that are. …For it is necessary that there be some nature (φύσις), either one or more than one, from which become the other things of the object being saved... Thales the founder of this type of philosophy says that it is water

That is it's roughly equivalent to our idea of matter; Anaximenes, a later philosopher chose air rather than water (notably this is two of the four elements), and Anaximander, his student etherealised it into the apeiron.
Why would Russell choose water as an 'originary' principle rather than a 'matter' principle? 
Particularly since then a theory of matter had already been worked out and was at hand. Was there in fact two competing explanations, and Russell chose the 'originary' one? Had he not read Aristotle, or was he working from bad translations (assuming he had little greek)?

A:

In the longer version Russell says this, inter alia, about Thales:

According to Aristotle, he thought that water is the original substance, out of which all others are formed;...
The statement that everything is made of water is to be regarded as a scientific hypothesis, and by no means a foolish one. Twenty years ago, the received view was that everything is made of hydrogen, which is two thirds of water. The Greeks were rash in their hypotheses, but the Milesian school, at least, was prepared to test them empirically. Too little is known of Thales to make it possible to reconstruct him at all satisfactorily, but of his successors in Miletus much more is known, and it is reasonable to suppose that something of their outlook came from him. His science and his philosophy were both crude, but they were such as to stimulate both thought and observation.

"Original substance" here might better capture the sense of "matter" that appears to drive this question. But, then, does matter really answer to, as your version says, the "principle of things that are"? Here, in the Greek, Aristotle speaks of "ἀρχή," which is the beginning or source from which something arises. The use of "matter" here seems to prejudge the issue, especially as Greek metaphysician can also hold the view that ether, a substance which is hardly reducible to "matter," is just this principle or source in question. Moreover, even if restricted just to "water," this idea of water as the "original substance" is hardly to say that it is necessarily restricted to the same types of things we might regard as composed of matter, for example, souls and so forth. In sticking to "originary principle" or "original substance," Russell seems to be trying to avoid imposing contemporary categories on ancient thought, surely an appropriate way of approaching such texts.

