I've played quite a bit of this game and I still don't understand. I keep seeing enemies move into firing range while my soldiers are overwatched and not triggering any reaction fire. Then they crit me in the face.
Overwatch is quite reliable to me: if an enemy moves within firing range and within Line-Of-Sight, overwatched troops will fire on them. However, the exception is when enemies edge into a tile within your line of sight but not move any more than that, in which case Overwatch won't activate (you can also use this move yourself against overwatched enemies). --- "Warriors of fate, you shall dance bravely. Use your golden wings, and fly to the skies. "
I didn't mean to suggest I was a complete newbie. I've got a Classic Ironman under my belt and a few failed attempts. On further inspection, I think what's going on is that overwatch doesn't trigger on movement into the final space. For example, if you've got an operative overwatching a door with a wall obscuring your vision, an enemy can get into firing range without triggering reaction fire as long as he stays outside of your vision and ends his movement on the first space you can target.
When an enemy moves from space 1 to 2, overwatch is not triggered as his movement was obscured. If the enemy crosses the opening from 2 to 3, overwatch is triggered.
Maybe this seems obvious to some of you, but I've been assuming that overwatch would trigger the moment an enemy moved into your line of sight. I've lost a few operatives because this is apparently not the case.