The Collaborative International Dictionary of English v.0.48:

Watershed \Wa"ter*shed`\, n. [Cf. G. wasserscheide; wasser water
   + scheide a place where two things separate, fr. scheiden to
   separate.]
   [1913 Webster]
   1. The whole region or extent of country which contributes to
      the supply of a river or lake.
      [1913 Webster]

   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; -- called also
      divide and water parting.
      [1913 Webster +PJC]

   3. a point in time marking an important transition between
      two situations, or phases of an activity; a turning point.
      [PJC]

The Collaborative International Dictionary of English v.0.48:

Divide \Di*vide"\, n.
   A dividing ridge of land between the tributaries of two
   streams; also called watershed and water parting. A
   divide on either side of which the waters drain into two
   different oceans is called a continental divide.
   [1913 Webster +PJC]

WordNet (r) 3.0 (2006):

watershed
    n 1: a ridge of land that separates two adjacent river systems
         [syn: watershed, water parting, divide]
    2: the entire geographical area drained by a river and its
       tributaries; an area characterized by all runoff being
       conveyed to the same outlet; "flood control in the Missouri
       basin" [syn: river basin, basin, watershed, drainage
       basin, catchment area, catchment basin, drainage area]
    3: 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, watershed]