The watershed algorithm utilizes the topographical representation of grayscale images, where high-intensity pixels represent peaks and low-intensity pixels represent valleys, to segment objects by treating the image as a surface filled with water. Two primary approaches, rainfall and flooding, are employed to identify catchment basins and build barriers to prevent merging of different regions. The final segmentation result is obtained by determining the watershed lines that separate distinct regions based on the rise of water through local minima in the image.