The most common and most likely answer to this crossword clue is the 11 plus 4 letter word OBSERVATION POST
I've seen this crossword clue in Financial Times
O
B
S
E
R
V
A
T
I
O
N
P
O
S
T
Buddy explains!
The straight part
We know that "Watchtower" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case watchtower = observation post.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.