Yes, WATERSHEDS is a Scrabble word!

Letter values in Scrabble US: W 4, A 1, T 1, E 1, R 1, S 1, H 4, E 1, D 2, S 1.

Is it a valid word?

WATERSHEDS is a valid word in the official Scrabble dictionary (US), the UK Scrabble Dictionary and Words with Friends (ENABLE).

a ridge of land that separates two adjacent river systems
the entire geographical area drained by a river and its tributaries; an area characterized by all runoff being conveyed to the same outlet
an event marking a unique or important historical change of course or one on which important developments depend

Also: water parting, river basin, drainage basin, catchment area, catchment basin, drainage area, turning point.