Without star strike duo Sam Vokes and Danny Ings, the Clarets looked to be heading for a second successive defeat until Arfield turned on the edge of the area to fire a low shot past Manuel Almunia after 86 minutes.
Troy Deeney had given Watford an early lead with a superb strike from 25 yards but the Hornets were made to rue their failure to get a second goal.
The home side have made a habit of making quick starts to a game and they were at it again in the eighth minute when Deeney netted his seventh goal in as many games with a fine effort from distance.
Receiving the ball around 25 yards out, the striker advanced before hitting a right-footed shot that was powerful but also had enough dip on it to take it over the helpless Tom Heaton to give the Hornets the breakthrough.
The visitors thought they had levelled five minutes later when Ashley Barnes got in front of the Hornets' rearguard to stab a Keith Treacey cross from the left past Almunia - but the goal was ruled out for a tight offside decision.
Following that let off, Watford started to press for a second with Lewis McGugan firing a shot across goal and just not too far wide of the far post before Deeney went closer, connecting superbly when the ball dropped to him on the edge of the area and firing narrowly over the bar.
But the Hornets suffered a blow towards the end of the first half when Cristian Battocchio came off worse in a collision with Ben Mee.
Referee Stuart Attwell, making his first appearance at Vicarage Road since his infamous 'ghost goal' error against Reading, initially allowed play to continue before the midfielder was finally allowed treatment.
Following a lengthy delay in play, Battocchio was carried off on a stretcher and replaced by Almen Abdi.
Watford continued in the ascendency after the break but clear chances were not forthcoming until around the 70-minute mark when the home side started to crank up the pressure again.
Ikechi Anya almost presented McGugan with a tap-in but his ball across goal from the right side of the penalty area was put behind by Chris Baird. The pressure continued from the resultant corner as Gabriele Angella and Daniel Pudil both saw efforts blocked.
But the Hornets then needed a fine save from Almunia to keep them in front, diving high to his left to keep out a Mee header from a corner.
That could have made it 1-1 but the Hornets came very close to making it 2-0 soon after when McGugan put Anya through on goal, he rounded Heaton but didn't make a clean contact with his attempted finish and as the ball trickled towards the unguarded net Baird was able to get back and clear.
And Watford's failure to get that second was to cost them when, with four minutes of normal time remaining, the ball was played into Arfield and he twisted before firing a low shot beyond Almunia to make it 1-1.