Could anyone help me understand this? (Season 7 Spoilers!)

The reason was because Caleb believed that he was Buffy's watcher

It had nothing to do with Xander being Buffy's watcher, that was Giles' job. Basically, Caleb ruined Xander's eye because as Caleb put it Xander sees everything "You're the one who sees everything, aren't you? Well, let's see what we can do about that." Then Caleb sticks his thumb in Xander's eye socket.