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In this tutorial, the speaker introduces formatting options for paragraphs in Word 2021. A paragraph is defined as any section of text created by hitting the Enter key. The speaker notes that the text copied from Wikipedia may not have appropriate paragraph breaks. By clicking the cursor and hitting Enter, users can create new paragraphs as needed. It's also mentioned that titles are considered paragraphs as well. The focus shifts to understanding how to effectively format paragraphs to improve text organization in Word.