Microdischarges formed in bubbles immersed in liquids are of interest for materials synthesis and chemical conversion applications in the frame of plasma-driven electrochemistry. A key challenge associated with controlling such processes is the limited understanding of the gas-phase chemical kinetics in these microdischarges. Due to their large electron densities, and high gas temperatures, both electron and gas temperature-driven chemistry are likely to be important. Here, a 0-D modeling approach, informed by experimental measurements, is used to study the chemical kinetics in these systems. A new reaction scheme is developed for microdischarges in water vapor, including reactions for both high electron density, and high gas temperature regimes. Microdischarges formed during plasma electrolytic oxidation are used as a test case, however, the key results are expected to be transferable to other plasma electrolysis systems with similar properties. Experimentally measured power densities are used as input to the 0-D model, together with estimates of temperatures and gas pressures within the gas bubble. Comparison of measured and simulated electron densities shows good agreement, given the limitations of both model and experiment. In the base case microdischarge, H2O is found to be highly dissociated during the period of peak power density, with H and O making up the majority of the neutral gas in the bubble. The maximum ionization degree is around 0.31%, and the electronegativity during the period of peak electron density is found to be low. Species formation and reaction pathways are analyzed under variation of the neutral gas temperature from 2000 K to 6000 K. At all temperatures, electron, ion, and neutral reactions with high threshold energies are found to be important for the overall chemical kinetics.