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In this video tutorial, the creator demonstrates how to create a table of contents in a Word document. They start by adding random text using the rand() command and then add headings for the table of contents. The headings are organized into different levels, with Level 1 being "Introduction" and additional levels like Level 2 and Level 3. To generate the table of contents, the creator assigns the headings to specific styles, such as Level 1 heading.