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What is an Outline Level ?

You can specify outline levels for individual blocks of text

You should use Outline levels in addition to using styles not as an alternative.

Outline Levels

This can also be changed from the (Format > Paragraph)(Indents and Spacing tab).

As well as using Styles in your documents you can also use Outlines.

You can specify outline levels for individual blocks of text and Word can use those outline levels in a number of useful features.