Rinse the cranberries under cold water and remove any stems.
In a medium saucepan, combine water and sugar. Bring to a boil.
Add the cranberries to the boiling sugar-water mixture.
Reduce the heat to medium and simmer for about 10 minutes.
Stir occasionally until the cranberries burst and the sauce thickens.
Add vanilla extract and stir well.
If using, add cinnamon and orange zest for extra flavor.
Remove from heat and let the sauce cool.
Transfer the sauce to a bowl and refrigerate for at least 2 hours.
Serve chilled or at room temperature.