How did the Watergate scandal create a constitutional crisis?

The constitutional crisis created by the Watergate scandal was whether or not the President of the United States could be indicted on criminal charges while in office.

President Richard Nixon was facing impeachment charges, and ultimately resigned rather than be impeached. But the question of whether or not he could be indicted on criminal charges came up prior to his resignation (which occurred on August 8, 1974). In March 1974, a grand jury issued indictments of seven White House aides for perjury and obstruction of justice. At that time, President Nixon was named an "unindicted coconspirator." Watergate Special Prosecutor Leon Jaworski had advised the grand jury that a sitting President could not be indicted.

After Nixon's resignation, the question of whether or not criminal charges should be pursued against him was resolved by Gerald Ford, who succeeded Nixon in the presidency. Ford granted a full and unconditional pardon to Nixon for any crimes he might have committed while serving as president. Ford's goal was to spare the nation any further turmoil from the ugly Watergate episode.

One way in which the Watergate scandal created a constitutional crisis was that it made people question the limits of executive power and secrecy at the highest levels of government in general.