Source : Webster's Revised Unabridged Dictionary (1913)

Watershed \Wa"ter*shed`\, n. [Cf. G. wasserscheide; wasser water
   + scheide a place where two things separate, fr. scheiden to
   separate.]
   1. The whole region or extent of country which contributes to
      the supply of a river or lake.

   2. The line of division between two adjacent rivers or lakes
      with respect to the flow of water by natural channels into
      them; the natural boundary of a basin.

Source : WordNet®

watershed
     n 1: a ridge of land that separates two adjacent river systems
          [syn: {water parting}, {divide}]
     2: an event marking a unique or important historical change of
        course or one on which important developments depend; "the
        agreement was a watershed in the history of both nations"
        [syn: {landmark}, {turning point}]