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The video tutorial demonstrates how to create a Table of Contents (TOC) in a Word document. It begins by adding random text using the rand() command and then proceeds to set up headings. The instructor creates several level 1 headings labeled "Introduction," and other short titles while explaining the hierarchy of headings. The tutorial emphasizes the importance of assigning the appropriate styles to headings, indicating that way, the TOC will reflect these levels accurately. The process of organizing headings into different levels, such as level 1, level 2, and level 3, is highlighted as a crucial step before generating the Table of Contents.