The aerosol impact on liquid water path (LWP) is a key uncertainty in the overall climate impact of aerosol. However, despite a significant effort in this area, the size of the effect remains poorly constrained, and even the sign is unclear. Recent studies have shown that the relationship between droplet number concentration (Nd) and LWP is an unreliable measure of the impact of Nd variations on LWP due to the difficulty in establishing causality. In this work, we use satellite observations of the short-term development of clouds to examine the role of Nd perturbations in LWP variations. Similar to previous studies, an increase followed by a general decrease in LWP with increasing Nd is observed, suggesting an overall negative LWP response to Nd and a warming LWP adjustment to aerosol. However, the Nd also responds to the local environment, with aerosol production, entrainment from the free troposphere and wet scavenging all acting to modify the Nd. Many of these effects act to further steepen the Nd-LWP relationship and obscure the causal Nd impact on LWP. Using the temporal development of clouds to account for these feedbacks in the Nd-LWP system, a weaker negative Nd-LWP relationship is observed over most of the globe. This relationship is highly sensitive to the initial cloud state, illuminating the roles of different processes in shaping the Nd-LWP relationship. The nature of the current observing system limits this work to a single time period for observations, highlighting the need for more frequent observations of key cloud properties to constrain cloud behaviour at process timescales.