You can login with Phone Number and Code in iPhone App.
You can scan QR Code on watch app by Telegram Phone app through "Settings > Devices > Link Desktop Device".
Option1: Reopen TGWatch iPhone App and Apple Watch App to retry again. (can resolve problem in most cases)
Option2: Check the connection between Apple Watch and your paired iPhone.
Option3: Check the network between iPhone and Telegram.
Option4: Relogin Telegram account on TGWatch.
Option5: Delete and re-install TGWatch to retry.