Goals from Jaidon Anthony and Josh Brownhill were enough to extend the Clarets’ unbeaten run to nine games ahead of their huge Boxing Day encounter against league leaders Sheffield United.
Watford, who were distinctly second best throughout, ensured a nervy finished when they pulled a goal back late on, but Scott Parker’s men held on for the three points.
Elsewhere at the top end of the division, top two Sheffield United and Leeds United were both victorious, while Sunderland came from behind again to beat Norwich City.
Play-off chasing Blackburn Rovers and Middlesbrough, meanwhile, both dropped points.
Following the weekend’s action, The Football League Paper has collated its Team of the Week, featuring the best performers – here’s the team in full:
1. James Beadle (Sheffield Wednesday)
The stopper saved a penalty and made a string of fine saves as 10-man Wednesday beat Stoke City 2-0. Photo: Ben Roberts Photo
2. Jayden Bogle (Leeds United)
The full-back was on the scoresheet as Daniel Farke's men thrashed Oxford United 4-0 at home. Photo: George Wood
3. Tom Holmes (Luton Town)
The centre-back was among the best performers as the Hatters came from behind to snatch a much-needed 2-1 win against Derby County. Photo: Matt McNulty
4. Dan Ballard (Sunderland)
The Republic of Ireland international scored Sunderland's equaliser as the Black Cats came from behind again to beat Norwich City 2-1. Photo: Stu Forster