。
She was watching the dead leaves drift down.
Literal
She [topic-は] dry-leaves [subject-が] scattering-go [nominalizer-の] [object-を] was-gazing-at.
枯葉が散っていく ('dead leaves go on falling') uses ~ていく for a process unfolding, gradual motion away. The nominalizer の wraps the whole clause as a noun-like object that 眺める ('gaze at, watch from afar') can take. 眺める is more reflective than 見る ('look') — it implies sustained, contemplative observation, often of landscapes or scenes. 枯葉 is a poetic seasonal image, woven into autumnal poetry and 和歌 (waka, classical Japanese poetry) tradition; the falling-leaves motif (落葉) is one of autumn's defining 季語 (seasonal words) in haiku.