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Drop-down lists are a useful way to restrict and control user input in Microsoft Word. They can be utilized to create surveys, conduct polls, and filter user input. To create a drop-down list, you first need to enable the Developer tab in Word. From there, you can define the options in the list and modify it to suit your needs. This tutorial demonstrates how to create, format, and modify a drop-down list in Microsoft Word for various purposes such as surveys and data collection.