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Styles are common elements in digital word processing and web resource development.  They allow creators to build documents, websites, and other things that are consistent and easily navigable.  For all but the most simple documents, styles are faster than using traditional formatting tools (such as separately selecting bold, italic, a font or text size.) 

Specific to MS Word templates allow for quick creation of documents with customized stylesets, together with boilerplate text, and other advanced features.  

Below are videos and text tutorials from Microsoft, ITS, and the Center for Online Learning & Innovation showing how to get the most out of styles and templates in Microsoft Word.

Styles in Word: the BasicsA brief but good introduction to using styles, showing various ways that they beat traditional "direct" formatting.
Apply Styles in Microsoft Word
Customize or Create New styles in Microsoft Word
Using a Quick Styleset in Microsoft WordQuick Stylesets allow you to change your headings and paragraph styles all at once. Word has plenty of pre-built stylesets, and you can create your own that appear in any new document.
Save a Word Document as a TemplateYou can create templates that in turn allow you to create documents that include custom styles. Templates can also include boilerplate text, and other advanced features. This is especially handy if you must create lots of separate documents from a common pattern.

Create a Navigable (with Table of Contents) .pdf file using Microsoft Word's Styles and Table of Contents Tools.

Incidentally, styles are found in other applications and software.  For example if you build and edit pages in Wordpress or the wiki (Confluence), or use Google Docs for word processing, you will also see something like styles there.  Again, they provide a variety of benefits over traditional direct formatting.