If you are decapitating somebody else: you arc possibly the winner in a conflict or a legal argument. Watching someone you know being decapitated: you are losing a person you love. Watching a stranger being decapitated: you might either defeat an adversary or create new enemies.
Depth Psychology: Decapitation is a sign that you are revising your present attitude about a specific event. Are you being ruled too much by your head? Maybe you should start trusting your intuition more and living accordingly! [1]
As with all dream symbols, the feeling, tone, and setting of the dream indicate which interpretation is appropriate. (See also: Beheading, Guillotine). [3]