Templates are style sheets with predefined format settings (margins, tabs, etc.) that are applied to a new document when it is first created. The default Blank Document in Word is a very simple template, but templates can contain any format setting available in Word. Templates can also be created as fill-in-the-blank forms, and Word comes with several examples you can use. You can also create your own.
The Blank Document
When you create a new document, Word prompts you to select a template. The default is the Blank Document, which is the most common and lets you start writing right away.
Word comes with a variety of templates to choose from. Note that there are both templates (.DOT extensions) and wizards (.WIZ extensions) available. The wizards prompt you through a series of steps to complete the document. The best way to learn about these is to try them.
Creating a New Template
You can create templates for your own document styles. Select File/New and click on a template to use as a starting point. The Blank Document is the simplest one; however, you can use any one. Be sure to click Create New Template before clicking OK. Change the fonts, margins, add headers, footers, etc. Then select File/Save. Your template will be stored in the default template folder and be available to you the next time you create a new document.