A wateshed is an area of land where all the water drains to the same location. Everyone lives in a watershed. They can be all shapes and sizes, and there are small watersheds within larger ones. For example, all of Illinois is in the Mississippi River Watershed, Rockford is in the Rock River Watershed, and there are 16 watersheds within Rockford which ultimately drain to the Rock River.
With that understanding it is easy to see how one negative impact to a watershed can also cause harm hundreds of miles away.
To learn more about the local watershed you live in click here to see an interactive map like the one below.