How does the teaching of Watchman Nee differ from the teaching of Reformed theology?
Well, for starters, I must admit that I do not claim to be an expert on Watchman Nee. However, allow me to suggest some brief points.
1) Watchman Nee apparently believed in on-going present-day revelations outside of the Bible. So, for instance, he could write this (I'm quoting from the WatchmanNee.org web site), "What the Lord revealed to me was extremely clear: Before long he would raise up local churches in various parts of China. Whenever I closed my eyes, the vision of the birth of local churches appeared ...."
This differs significantly from Reformed Theology, since we believe that the fullness of God's revelation is contained in Scripture alone. In other words, God speaks to us today through his written Word, not through direct revelations.
Making such a case from the Bible is beyond the scope of this forum. I would simply direct you to the very fine work done by Richard B. Gaffin in his book Perspectives on Pentecost, P & R Publishing. In that book, Dr. Gaffin expounds all the relevant biblical passages to make the Reformed case against present-day direct revelations.
2) The Watchman Nee web site also says this about Watchman Nee: "Because of what he saw in the Word, he was exercised to live purely and singly by faith in God not only for his living, but also for every aspect of the Lord's work. Hence, he steadfastly refused employment by any person or organization."
Reformed Theology does not teach that any man, not even a minister of the Word, must live in poverty. In fact, Paul teaches that we should work in order that we may eat (2 Thess. 3:10-12). We should work and earn money so as to share with others who are in need, (Ephesians 4:28). Certainly Paul worked to help supplement his own income (Acts 18:3). And Paul taught that the one who labors in the word should receive payment for his work in the church (1 Cor. 9:9-11; see also 1 Tim. 5:17-18).
3) Nee also believed "that, according to the Bible, denominations are wrong ..." Certainly, denominations are not ideal. All Christians should have a visible witness of unity. But, unfortunately, there are differences of opinion in matters of faith and practice. And for conscience' sake, there must be different denominations of Christians who disagree over very simple practical issues. For instance, do we baptize babies or no? We Presbyterians say yes; our Baptist brethren say no. How would these two groups do church together? What would be the official policy on baptism?
That said, however, we should keep in mind that Reformed Theology does teach the unity of the church. For example, we believe that while our Reformed Baptist brethren worship in a different building than we do, and even though they don't baptize infants, we are still part of the same universal and invisible church. They are no less the body of Christ than we are. We might wish that it be otherwise, but, unfortunately, this side of glory, and for the sake of Christian liberty, denominations are necessary.
4) Watchman Nee's influences seemed to have been associated with the Plymouth Brethren and the writings of John Darby. These folks basically taught that office in the church was unbiblical. So, he didn't believe in churches governed by elders as we Reformed do. Also, going hand in hand with these influences would have been the approach to interpreting the Bible called "dispensationalism." Reformed theology does not adhere to this method of interpretation, but rather believes in what is called "Covenant Theology."
The basic difference between the two systems of reading the Bible is that dispensationalism divides the Bible up into different ways in which God saves his people. Covenant Theology believes that there is only one way in which man is saved by God from the fall to the return of Christ and that is by grace alone, through faith alone, because of Christ alone. For further reading in the differences between dispensationalism and covenant theology, see A Primer on Dispensationalism by John H. Gerstner, Wrongly Dividing the Word of Truth: A Critique of Dispensationalism (second edition) by John H. Gerstner with Don Kistler, Dispensationalism: Rightly Dividing the People of God? by Keith A. Mathison, and Understanding Dispensationalists by Vern S. Poythress.
Well, this should give you some basics. So as not to sound uncharitable, however, I would also recognize that Watchman Nee was used by the Lord in a very powerful way to spread the good news of the Gospel of Jesus Christ. Nee apparently believed that many people in China were relying upon their works to gain eternal life, but his emphasis in preaching was upon the finished work of Jesus Christ. And for that work we rejoice and thank God.