The Watcher was a future projection of the Doctor's fifth incarnation that appeared to the Doctor at the time of his fourth regeneration. (DW: "Logopolis")
Background[]
John Nathan-Turner: "The Watcher is really a future projection of the new Doctor. Because of the series of circumstances in the last story, "Logopolis", the prospect of the regeneration is not really a happy one. Consequently, there is the future projection of the new Doctor, who, within the story actually speaks to the Tom Baker Doctor and tells him what is about to happen. Much of that is seen as a kind of dumb show in long shot on a bridge but he is actually telling him that this is his last story and that a new Doctor is on the way."