It is demonstrated that many-body force field models based solely on pairwise Coulomb screening cannot simultaneously reproduce both gas-phase and condensed-phase polarizability limits. Several many-body force field model forms are tested and compared with basis set-corrected ab initio results for a series of bifurcated water chains. Models are parameterized to reproduce the ab initio polarizability of an isolated water molecule, and pairwise damping functions are set to reproduce the polarizability of a water dimer as a function of dimer separation. When these models are applied to extended water chains, the polarization is over-predicted, and this over-polarization increased as a function of the overlap of molecular orbitals as the chains are compressed. This suggests that polarizable models based solely on pairwise Coulomb screening have some limitations, and that coupling with non-classical many-body effects, in particular exchange terms, may be important.