A watershed is an area of land that feeds all the water running under it and draining off of it into a body of water. It combines with other watersheds to form a network of rivers and streams that progressively drain into larger water areas.
Topography determines where and how water flows. Ridge tops surrounding a body of water determine the boundary of a watershed. Imagine turning an open umbrella upside down in the rain. Rain that hits anywhere within the umbrella's surface area would go to the bottom at the center of the umbrella. Any rain that didn't hit the umbrella would fall to the ground. The umbrella is like a watershed; it collects everything that falls into it.
Text Source: HOWSTUFFWORKS
Image Credit: HOWSTUFFWORKS
The water cycle is called the hydrologic cycle. In the hydrologic cycle, water from oceans, lakes, swamps, rivers, plants, and even you, can turn into water vapor through evaporation. Water vapor condenses into millions of tiny droplets that form clouds. Clouds lose their water as rain or snow, which is called precipitation.
Text Source: Anacostia Watershed Society
Image Credit: USGS