A true hardware watchdog is separate electronics. For example, it's really easy to make an electronic circuit that operates a relay once every 5 minutes, say, unless a 'restart timer' button is pressed. Connect the relay contacts across the PC reset button, and run a program on the PC that 'presses' (electronically) the 'restart timer' button once a minute, say. Then if the PC fails to boot, it gets reset once every 5 minutes until it does (fairly obviously, another set of relay contacts can be used to trigger an alerting device, e.g. wailing sirens).

We use this sort of approach with diskless systems in particular. If there's a power cut, the first boot attempt after power restoration might not work (because the network isn't back up yet). So the diskless systems just sit there, continually attempting a network boot until successfu (at which point the software on the PC hits the 'restart timer' button periodicaly.

This is closely related to the concept of a "deadman's handle", for example train drivers who must keep a lever pressed down during operation - if it's released, the train stops automatically.

Preface: my knowledge here is on ARM, particularly baremetal, but also embedded Linux. No idea about Windows or x86.

Generally there’s a hardware watchdog implemented as a counter/timer in the processor. It can have a predefined or configurable period. It counts down, and if it times out then it initiates a hardware reset of the processor.

You can ensure your software/OS is always at least executing code by having a task (in-kernel on Linux, or an RTOS task, or just in your main event loop on baremetal) that resets that timer. Then, if your code stops resetting that timer, it expires and resets the processor.

Embedded micros (Systems On a Chip) often include dedicated watchdog hardware. This is a timer which is reset ("fed") by writing values to a specific register. Crucially, it often isn't just one value; you have to alternate between two values. That way, you can write one value at one point in your event loop and the other value at another point, making it less likely that something will break but keep feeding the watchdog.

If the watchdog hasn't been fed for X milliseconds, then it resets the system.