Sam Allardyce's side had been aiming to find their first win away from Goodison Park since December on Saturday evening but presented little impetus going forward and didn't look entirely solid in their defensive play.
They had chances, but only one - a relative miskick from Oumar Niasse - was registered on target. Instead, their chances went high over Orestis Karnezis' net.
Gracia's side edged out the first 45 minutes despite the Niasse shot on target but it was in the second-half where they would eventually break the deadlock.
In a few moments of madness for the Everton backline, Deeney, the Watford captain, was able to capitalise.
With his back to goal, Deeney spun as he collected the ball unchallenged from a Stefano Okaka pass inside the 18-yard-box.
The Hornets talisman then rifled his effort straight into Jordan Pickford's right-hand top corner to give the home side the lead and in the end, the victory.
Hornets edge first period but neither side produce much quality
The hosts edged the first half of a Premier League game that was devoid of Premier League quality.
A grand total of one shot on target, coming from the away side, where Niasse somehow directed a tame effort onto Karnezis’ near post after 20 minutes.
It was the former Everton man Gerard Deulofeu who looked to be the catalyst for anything positive coming the way of the home side.
The young winger sized up the out of position Cuco Martina on a handful of occasions but as he did countless times during his two spells on Merseyside, he drilled his crosses into the body of a central defender.
Deeney strike separates sides
In recent weeks, Allardyce has echoed the need for his side to replicate their home form during their trips away from Merseyside.
Yet, he nor the fans are yet to see anything that would look anything like the Blues' form inside the friendly confines of Goodison Park.
When the sides last met, it was a wild encounter that saw David Unsworth's side edge out a hard-fought battle and ride their fair share of luck through the 90-minutes.
Their attacking display at Vicarage Road was less than limited. They failed to challenge Karnezis with any sort of regularity, instead seemingly opting to wait and hopefully see the game out for a bore draw and take a share of the spoils back to Merseyside.
Watford climb whilst Blues stand still
The win allows the Hornets to climb to tenth in the Premier League table.
The Toffees travel to Turf Moor next Saturday lunchtime to face Sean Dyche's high-flying side but instead of having the chance to grow a lead on them, they'll be battling to draw level.