Q: How do I know if it is the Water Pump or thermostat that needs replacing?

In your question, you have not stated the "fault" you are experiencing, consequently I will assume it is overheating. If not, please write back in with clarification so that we can best assist you. There are a myriad of causes of overheating and consequently the only way to pinpoint the root cause(s) on your vehicle is to have a certified Mechanic perform a cooling system diagnostic. Just to give you an idea of the extent of it, even potentially dragging brakes can cause overheating as can excessively lean engine operating condition (too much air, too little fuel) but it is common for thermostat to be stuck shut (and stuck open too, which degrades engine fuel economy), radiators to be partially blocked, hoses to be collapsed (blocking coolant flow), fans non functional, and water pumps that are not pumping at the design (required) rate. All of these potential faults, and others, would be ruled in or out during a cooling system diagnostic. To answer your question, yes absolutely even if your cooling system has no leaks the water pump could be non functional because either the pump drive belt lacks tension and/or sometimes pump impellers erode or shear off. As far as the thermostat, that is typically suspected after as many "external" and obvious causes of overheating are ruled out. Thermostats do have a limited lifetime and, in fact, are changed as a matter of course, as a precaution and as cheap insurance, whenever major work is done on the cooling system. So, if it turns out you need a water pump, undoubtedly a good mechanic will recommend that you install a new OEM (not aftermarket) thermostat. Please let us know if you have further concerns. If you schedule the diagnostic a certified Mechanic will pinpoint the cause(s) of the overheating you are experiencing.