Every Stream has a drainage basin, which is the spatial geomorphic unit occupied by a river system. It is defined by ridges that form drainage divides; that is, the ridges are the dividing lines that control into which basin precipitation drains.
Drainage divides define a watershed, the catchments area of the drainage basin. It is to be noted that the drainage basin and its watershed are separated from other basins by a drainage divide. Remember that the high ground that separates one valley from another is called interfluves.
Further, a major drainage basin system comprises many smaller drainage basins. These smaller basins in turn may have even smaller basins which are divided by specific watersheds.
Each drainage basin collects and transports its precipitation as well as sediments to a larger basin, which ultimately is delivered to a still larger basin. Any change that occurs in any part of the drainage basin can affect the whole system.