I have run the following command to ignore watching/tracking a particular directory/file:

git update-index --assume-unchanged <file>

How can I undo this, so that <file> is watched/tracked again?

To get undo/show dir's/files that are set to assume-unchanged run this:

git update-index --no-assume-unchanged <file>

To get a list of dir's/files that are assume-unchanged run this in a unix shell:

git ls-files -v | grep '^h'

or in a PowerShell:

git ls-files -v | Select-String -CaseSensitive '^h'