A watershed is an area that collects, stores and transports all forms of precipitation, depositing it into a particular water body. In addition to land, a watershed may include streams, lakes, reservoirs, aquifers, estuaries, and wetlands. The term is not restricted to surface water runoff and may include interactions with subsurface water. Watersheds vary from the largest river basins to just acres or less in size. A watershed's boundaries typically are formed by a geographic barrier or divide, such as areas of higher elevation. The term watershed is thought to derive from the German wasserscheide (wasser meaning water, and scheide meaning boundary). The terms catchments and drainage basins are also used, sometimes interchangeably, with watersheds. A "closed watershed" is one whose flow generally remains within the boundaries of a watershed during typical hydrologic conditions, while "open watershed" refers to a watershed whose flow exits through an outlet of the watershed (for example, a river draining into an ocean).
Watershed ecology is the study of the structural and functional interrelationships among living organisms and the physical environment within a watershed. As water flows over the ground and along stream it can pick up nutrients, sediment, and pollutants. Like the water, these constituents are transported towards the outlet of the basin, and can affect the ecological processes within the flow path, as well as in the receiving water source. For example, the use of fertilizers, especially those containing high levels of nitrogen and phosphorus, may detrimentally affect the ecology of receiving water bodies.
Watershed management is the active planning for and working toward an environmentally and economically healthy and ecologically sustainable watershed. "Watershed management plans" address issues pertaining to these matters, identifying projects, recommending actions, prioritizing projects, and estimating costs.