Any part that moves is subject to wear. Typical friction damage will be evident at pivot points, jewel holes, and setting and winding gears. When you have your watch is serviced, the watchmaker will lubricate all friction points. After years of use, the lubricant dries up, and jewels and pivots can experience extreme wear. Dust can also mix with the oil that has migrated to other parts of the watch, causing malfunction. As pivots wear out, the wheels (the term used to define gears) can start leaning and damage gear teeth. The more complicated the watch (calendar, automatic, chronograph functions), the more parts wear out. Impact damage can result in bent/broken pivots and cracked jewels.
Each time the watch is wound, or you pull out the stem for setting, this exposes small levers to quite a bit of friction. Without regular cleaning and greasing, this repeated friction will cause some severe non-repairable wear on these parts.