Not to be mistaken for a guard dog, a watchdog is a specially trained pet that can help you avoid - or find - trouble. They can be purchased from any animal trainer NPC.
Blessed with detection abilities greater than that of any human, elf, or gargoyle, each watchdog has had its senses (mostly smell and hearing) tuned and is trained to help you, its master.
Upon sensing nearby strangers, your watchdog will alert you by barking or growling. Watchdogs treat all players as strangers, unless they are your party members or guildmates.
A watchdog's intuition reads a bit of every player's character, and this comes out in the dog's alert as he gives three kinds of warnings: One for murderers, another for suspicious characters who are either thieves or have murder counts, and another for those who have no murder counts.
Once you have been alerted about a particular person, your watchdog will not sound another alarm about them for a few moments; he has done his job and will not try to annoy you. However if another person is nearby you will receive another alert; thus if you hear two angry barks in quick succession, that indicates that there are two people nearby.
Watchdogs are not particularly alarmed by pure innocents, and will not bark multiple times for multiple people who have no murder counts.
Players who are hidden and immobile have a chance of evading a watchdog's detection. Depending on the humidity, direction of the wind, and other outside factors, you and your dog may walk right past somebody. However, once a hidden person moves, the watchdog will sound an alert.
A watchdog does not need to be near you to be useful. When ordered to stay at a remote location, such as your house, you will still be able to hear your watchdog's alerts from far away.
Watchdogs have two levels of alertness. When the dog is moving around, it is actively searching for people and can detect players from significantly further than you can see. On the other hand, when the dog is not moving, its senses are not working as hard and can only detect people within a range that is only slightly better than your own senses.
Watchdogs cannot be shrunk, bonded, transferred, or ordered to fight. If released, it will disappear. Monsters generally will not attack watchdogs, but dogs can be attacked by players. Watchdogs can be stabled, and they will recall and log out with you.
When used carefully, a watchdog makes an excellent hunting companion, warning you of incoming threats and giving you a vital few extra seconds to prepare or flee.