It is too hot to touch? Dropping villagers by the waterfall will have them carrying water to cool it - children work for this task, and they move much faster than most adults. When steam stops rising, or people wash instead of carry water when you drop them on the falls, it should be cool enough to carry.

I'd like to note this is not a bug, and is clearly described in the game's guide, which is in the 'guides' section of this very forum.