By default, Word applies the ‘Normal' style to your document untill you change it.  If you click on the styles box pull-down arrow, you will see this...

Word ships with a number of styles as standard.  You can apply a style simply by selecting it from the list. Why should you bother with styles when you can use the formatting options instead? The most compelling reason is that Word monitors your use of styles and constructs both Tables of Contents as well as ‘Document Maps' from them. FInally, specifying a particular style will ensure that different people contributing to the same document will have no difficulty maintaining consistency of presentation. Using styles also allows for a consistent look across all your documents.

 

Styles can be edited, by the way.  To do so, select the Format/Style... menu option.  You will see the following dialog box.

The ‘Organiser...' button allows you to do some ‘housekeeping' regarding which styles, autoText macros etc should reside in your NORMAL.DOT file (the configuration file used by Word to store your default settings).

Click the Modify... button, and you will see this...

You can nominate a style to automatically succeed the current style.  Eg: Heading1 should be followed by Heading2, and Heading2 should always be followed by Normal style.

All the usual formatting options are available via the ‘Format' button, which will apply the format changes to the STYLE, not to particular text.