If you want to insert content from other file like plain text file or Word document into your current Word document use the Text from file… feature. It is a lot faster than opening second file and using Copy & Paste.
Also if you insert Word document you can be sure that the formatting is kept. For example text formatted as Header 1 will still be Header 1, page breaks will be kept, etc.
Difference between inserting text and inserting object (Word, text file)
Difference is that in second case document can be edited only in separate Word window as it is attached file. When you use Text from file… feature there is no link to document where the text was taken from. Text becomes part of the main document.
Go to INSERT tab
Click Object buttonIn case of smaller Word window:
Text from document will be inserted.