If your Apple Watch does not respond to touchscreen inputs as expected, then the following steps may help:
Remove any screen protector, case or bumper that you may have fitted to your Apple Watch.
If you have not yet done so, update your iPhone and Apple Watch to the latest compatible software versions, starting with your iPhone:
Clean and dry your Apple Watch, being sure to follow Apple's cleaning instructions:
Restart (normally) your Apple Watch and iPhone, turning both devices off together, then restarting your iPhone first:
If the issue persists, next unpair and re-pair your Apple Watch:
If the issue persists, then I suggest that you contact Apple Support (remote diagnostics and/or mail-in service may be available, if required), make a Genius Bar reservation or visit an Apple Authorised Service Provider for assistance: