component and sub-component
 

In my model, I have one component and two sub-components. One sub-component is the base structure and the other is the waterwheel (which is attached above the base structure with the help of a piston, plate, nuts and bolts). By this, the two sub-components would be coupled together by flow3d as they are a part of one component only (and are not two different components.)

Now, my doubt is whether the water wheel would be able to rotate if I activate the moving object model or not? Would flow3d couple the two sub-compeonents to such an extent that there is absolutely no relative motion between the two, or would it be possible that the axis of the waterwheel is fixed with respect to the base sructure and the waterwheel is able to rotate on this fixed axis?

to let the wheel rotate around a fixed axis, and the other subcomponent non moving, you have to define the wheel as a separate component.
The motion properties are related to the component, not the subcomponent, so if the wheel and the rest move (or not move) differently you have to keep them separated in different components.
Then the wheel can easly rotate around a fixed axis, it is not a problem.

Thanks for your reply Stefmascio

What if both the base structure and the water wheel are moving together (i.e., they are coupled together with the help of a cylindrical piston, etc) in forward direction in addition to the rotation of the wheel? Then, should I give them as two separate components or two sub-components of the same component.

I'm not sure to have understood the linkage between the two objects, but probably they should be defined under the same component. If you group them under the same component it is like the two objects are a unique rigid object. You can try to see the differences.