The media ultimately is the "watchdog" for the government. The media (ideally) is supposed to report on things going on in the government to inform the citizens in a truthful and unbiased manner. Media can influence the government by reporting on issues, especially during election times. Once they inform the public, then they go out and vote, which in turn may affect the government greatly.
The term watchdog refers to watchdog journalism, where the media will report on hot issues, specifically where the public calls for change.