Watchdog timer, essentially, prevent processor from stall states, if something goes wrong with some instruction or some operation he reset the machine at the initial state. For that reason he have to be refilled periodically by the software for keep it far from zero (that means machine stuck) and is mainteined in infinite count.
You can disable it, but in this case you don't have advises of machine stucks and if some instruction goes wrong the processor simply stall remaining in this state until manual reset.
Usually depends on your uController, in PIC Microchip there are option in the configuration words, in AVR Atmel there a fuses.
U can decide of switch it off, it's like working without protection... maybe 99% of times it's useless, but in some critical application, without watchdog, the process simply stuck and without a manual reset u can't get ride of it.
Sorry but i'm not experienced in 8051 architectures, i think u can find something from your IDE, i don't know what kind of language do you use (C, Assembly), or if u use Keil nor IAR, try to google "watchdog <yourIDEname>".