Do I own a watchdog?
Most modern PC hardware includes watchdog timer facilities. You can read more about them here via wikipedia: Watchdog Timers. Also from the Linux kernel docs:
excerpt - https://www.kernel.org/doc/Documentation/watchdog/watchdog-api.txt
A Watchdog Timer (WDT) is a hardware circuit that can reset the computer system in case of a software fault. You probably knew that already.
Usually a userspace daemon will notify the kernel watchdog driver via the /dev/watchdog special device file that userspace is still alive, at regular intervals. When such a notification occurs, the driver will usually tell the hardware watchdog that everything is in order, and that the watchdog should wait for yet another little while to reset the system. If userspace fails (RAM error, kernel bug, whatever), the notifications cease to occur, and the hardware watchdog will reset the system (causing a reboot) after the timeout occurs.
The Linux watchdog API is a rather ad-hoc construction and different drivers implement different, and sometimes incompatible, parts of it. This file is an attempt to document the existing usage and allow future driver writers to use it as a reference.
This SO Q&A titled, Who is refreshing hardware watchdog in Linux?, covers the linkage between the Linux kernel and the hardware watchdog timer.
What about the watchdog package?
The description in the RPM makes this pretty clear, IMO. The watchdog daemon can either act as a software watchdog or can interact with the hardware implementation.
The watchdog program can be used as a powerful software watchdog daemon or may be alternately used with a hardware watchdog device such as the IPMI hardware watchdog driver interface to a resident Baseboard Management Controller (BMC). watchdog periodically writes to /dev/watchdog; the interval between writes to /dev/watchdog is configurable through settings in the watchdog sysconfig file.
This configuration file is also used to set the watchdog to be used as a hardware watchdog instead of its default software watchdog operation. In either case, if the device is open but not written to within the configured time period, the watchdog timer expiration will trigger a machine reboot. When operating as a software watchdog, the ability to reboot will depend on the state of the machine and interrupts.
When operating as a hardware watchdog, the machine will experience a hard reset (or whatever action was configured to be taken upon watchdog timer expiration) initiated by the BMC.