The Reds went into the Vicarage Road clash on Monday night looking to bounce back from last week’s defeat against Crystal Palace and take advantage of both Manchester United and City being held by Swansea and Middlesbrough respectively on Sunday.
Jurgen Klopp’s men were rocked by the early loss of Philippe Coutinho to injury and the game failed to get going until late in the half when the Reds rattled the crossbar, before Can lit up an otherwise dour affair with a brilliant goal.
Chances were at a premium after the break, although the Hornets did hit the woodwork deep into inury time as Liverpool held on for the three points which leaves them in third place, four points clear of Manchester United in fifth, although Jose Mourinho’s side still have a game in hand.
Watford stay in 13th on 40 points and are virtually guaranteed Premier League football again next season.
Liverpool were hit by an early injury blow as Coutinho appeared to hurt his thigh in a challenge for the ball with Adrian Mariappa.
And, while the Brazilian tried to continue, he was eventually replaced by Adam Lallana in the 13th minute with the midfielder making his comeback from a five-week knee injury absence.
A couple of minutes later and Watford were also forced to make a switch as Miguel Britos limped off to be replaced by Christian Kabesele.
The first shot in anger came in the 22nd minute when Can hit a low drive from just outside the area which Heurelho Gomes got down well to save.
Lallana almost broke the deadlock in the 41st minute when Gomes could only punch a Liverpool corner to him just outside of the area. And the England international hit a first-time volley which crashed down off the crossbar before being scrambled away by the Hornets defence.
The visitors took the lead in first half stoppage time in spectacular fashion when Lucas Leiva chipped the ball into the Watford area and Can beat Gomes with a brilliant overhead kick.
Liverpool started the second half on the front foot and Gomes was called into action in the 49th minute when James Milner curled in a right-foot free kick from the left which the Brazilian pushed away.
On 53 minutes Divock Origi cut inside from the left flank and hit a right-foot strike which Gomes got across to parry away for a corner.
Origi was played in down the right channel on 57 minutes and he managed to get beyond the last defenders but his angled strike was straight at Gomes.
It took until the 68th minute for Liverpool keeper Simon Mignolet to be tested as he got his finger tips to a strike from Etienne Capoue from just outside the area and helped it over the top.
Lallana could have given Liverpool a two-goal cushion on 76 minutes when he was played in by Can but he skewed his effort wide of the goal from inside the area.
Watford gradually upped the tempo as they went in search of an equaliser and Daryl Janmaat tested Mignolet with a surging run and shot from 25 yards on 83 minutes, but the Belgian custodian got down well to make the save.
Liverpool substitute Daniel Sturridge almost put the icing on the cake in stoppage time when he surged into the area and hit a low strike which Gomes got a strong hand to and watched as the ball bobbled just wide of the goal.
There was still time for Sebastian Prodl to spurn a golden chance to equalise for Watford as he slammed a close-range effort off the crossbar with almost the last kick of the game.
Goalkeeper Wayne Hennessey hopes to remain at Crystal Palace ahead of his deal expiring after holding talks over an extension.
Burnley boss Sean Dyche says he will not be making a raft of signings this summer despite the demands of European football.