Garde took the decision following reports about the 20-year-old attending a nightclub in Manchester hours after Villa's 4-0 loss at Everton.
He added that Grealish would be training with the club's under-21 side.
"He won't be included in the squad for Watford. (His actions) are not of the professional standard that I expect from my players. That's why Jack is training in the under-21 team," Garde said at his pre-match news conference.
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This was not the first time that the talented Grealish has been in hot water for his off-field behaviour.
Villa's former manager Tim Sherwood warned him in April about his conduct after photographs emerged of him allegedly inhaling nitrous oxide in a hotel room.
"English footballers have become more professional but you see young footballers wanting to live life all over, we forget in their brain they are 20," Garde said.
Villa, who are bottom of the league, are still searching for their first win under Garde, who took over from Sherwood last month.
They have not won since the opening day of the season on Aug. 8.
"It is my responsibility to find some solutions quickly because we need them. I am not expecting an easy game because Watford have done well," Garde said.
(Reporting by Shravanth Vijayakumar in Bengaluru, editing by Ian Chadband)
