Genesis 10:25 says, "
וּלְעֵ֥בֶר יֻלַּ֖ד שְׁנֵ֣י בָנִ֑ים שֵׁ֣ם הָֽאֶחָ֞ד פֶּ֗לֶג כִּ֤י בְיָמָיו֙ נִפְלְגָ֣ה הָאָ֔רֶץ וְשֵׁ֥ם אָחִ֖יו יָקְטָֽן׃ (Westminster Leningrad Codex)
"And to Eber were born two sons, the name of one (was) Peleg, for in his days divided was the earth and name of his brother (was) Joktan." (Interlinear)
Most commentaries refer to "נִפְלְגָ֣ה הָאָ֔רֶץ" (land divided) as refering to the division of the nations, resulting from the dividing of tongues at Babel.
Among the descendants of Arphaxad, Eber's eldest son received the name of Peleg, because in his days the earth, i.e., the population of the earth, was divided, in consequence of the building of the tower of Babel (Genesis 11:8) (Keil & Delitzsch-taken from here)
However, there are some who take "נִפְלְגָ֣ה הָאָ֔רֶץ" to quite literally mean "division of continents". One such claim is "Divided by water" made here:
Therefore, the earth was probably divided by water in Peleg’s day. The hydroplate theory explains how and why.
So, which is it? the traditional understanding of "people groups/languages" or a "division of land" resulting in the separation of lands by water, or some other means?