It is attached to the vehicle prior to placing it and before dipping it into the water.
With clear back decal paper it’s best to immerse the sheet in water for just a few seconds, so that the decal will begin to peel away from the backing. You can peel the decal off, and then remove the backing completely from the water. After you have removed the backing the decal should be lined the decal up and then place it on the damp side of the vehicle. As the decal drys it is important to make sure that there aren’t any air bubbles. When the decal has dried the decal, you’ll stick it on the vehicle’s side.