Why didn't the dentist fill my cavity but instead "put a watch" on it? what does that mean?

A "watch" on tooth: Sometimes the beginning of decay on a tooth or the breakdown of integrity of an existing filling is so small that the dentist decides the placement (or replacing ) of a filling need not be done at that time. Instead the dentist decides to observe it over time and restore the tooth if the condition worsens. It's a judgement call.