A template is a document with a preset layout or preset styles for formatting. They serve as a basic structure for a document and can be used to eliminate the need for repetitive recreation of the same format across documents. Templates feature prearranged formatting options such as font face, font size, language, spacing, alignment, and more.
There are two kinds of templates: built-in and custom.
Built-in templates provide preset structures for common documents such as:
Custom templates, on the other hand, are formatting options and layouts that are set up by the user and saved as a .dotx file. You can modify an existing template or you may set one up starting from a blank document.
Instructions can be found at Microsoft's Create a new Office file using a template.
Select the template you want, then click Choose.
If you created folders to organize your templates, the folders are displayed under My Templates. You need to click the folder to see the templates.
Select the template you downloaded, then click OK in the New Dialog box.
You may need to look in the My Documents or Documents folder on your computer in order to find the template file.
A Style is a collection of formatting commands, combined in a single command. All text in Word has a default Style of Normal which (in 2016) typically has the following settings: 11-point Calibri font, with left-aligned paragraphs, line spacing at 1.08 with an after spacing of 8 pt, and no indenting.
Why Should I Use a Style?
Watch these short videos from Microsoft about Using styles in Word.
Microsoft has a tutorial on using styles in Word for Mac 2011.