Concept:
A watershed is an area from which runoff drains to a common outlet.
Step 1: Watersheds may be classified into basin, sub-basin, watershed and micro-watershed depending on size.
Step 2: A micro-watershed is a smaller hydrological unit.
Step 3: It is useful for detailed planning of soil conservation, water harvesting and drainage works.
Step 4: River basin is much larger, while flood plain refers to land near a river that may get flooded.
Step 5: Hence, the correct answer is:
\[
\boxed{\text{Micro-watershed}}
\]