Multimedia technology usages is increasing day by day and to provide authorized data and protecting the secret information from unauthorized use is highly difficult and involves a complex process. By using the watermarking technique, only authorized user can use the data. Digital watermarking is a widely used technology for the protection of digital data. Digital watermarking deals with the embedding of secret data into actual information. Digital watermarking techniques are classified into three major categories, and they were based on domain, type of document (text, image, music or video) and human perception. Performance of the watermarked images is analysed using Peak signal to noise ratio, mean square error and bit error rate. Watermarking of images has been researched profoundly for its specialized and modern achievability in all media applications such as copyrights protection, medical reports (MRI scan and X-ray), annotation and privacy control. This paper reviews the watermarking technique and its merits and demerits. [ABSTRACT FROM AUTHOR]