To have water bodies, there must be a cycle to maintain a continuous supply of fresh water. This cycle is called the hydrological process (water cycle). It has 4 main processes.
I'll explain in my own words what these processes are.
Evaporation and Transpiration are when water from water bodies (e.g. rivers, lakes, oceans) and from plants evaporate to form water vapour. The water vapour rises up into the air.
Then, Condensation of the water vapour takes place. This process causes the water vapour to be cooled, thus forming water droplets. These water droplets form clouds in the sky.
(so now we know that clouds are actually made out of many tiny little water droplets and not steam or smoke!)
The clouds of water droplets get too heavy and it begins to rain, hail or snow. Or in other words, Precipitate. The water droplets fall to the earth.
When the precipitate reaches the Earth, it is classified as Groundwater or Runoff, thus returning back to the water bodies fresh and clean.
The River System
The place where a river starts is at its river source. It is usually found in the highlands, from melting snow, lake or stream, which flows downwards. This path which the river flows is called the river course. The "mini-rivers or streams" that join a main river, are called tributaries. Rivers end when they reach the river mouth, usually found at a lake, or a sea. The main river and its tributaries form a river system.

Drainage Baisin
The area that is drained by a river an its tributaries is called a drainage basin.
The watershed is an imaginary line that separates a drainage basin from another. So it's like a line in between two drainage systems drawn with invisible ink.