Whether finger picking or using a pick, I use a guide finger... I let my pinkie barely rest on the pickguard just below the bottom string. Doing this gives me a reference point and eventually you'll know right were each string is. If finger picking it's also helpful to designate a string to a certain finger. I use my thumb for the bass note of the chord and sometimes the string under that depending on the chord and pattern, my pointer gets the d string, middle gets the g string, ring finger gets the b string. Sometimes I use the ring for the e as well and sometimes I'll pull the pinkie I use as an anchor... It just depends on the piece.
Work at it slowly and accurately. Trying to go too fast just causes you to hit the wrong string and everytime you do that you're teaching that finger to hit the wrong string. Muscle memory works both ways so be sure to hit it right and then work on building up speed.
Also you said you're watching the fretboard. I'd recommend trying to break that habit. If you're depending on your eyes to find the string you're not really going to build good muscle memory. Try practicing some in the dark, it really helps to break the habit of watching the fretboard.
Just some thoughts...
