Few newspapers or Web sites would use text content in which every paragraph looks the same. Normally, you use structural elements (such as a title, headings, sub-headings, or captions to images) to help readers make sense of the published content.
Typically, you want to format each element consistently. You want all the body text in a smaller lighter font, but the title in a larger heavier font. You need a lot of vertical space before all the major headings, but none before the captions under images.
Moreover, you may want to group some formatting settings together, in order to have a consistent formatting on all News pages, different than formatting on all Features pages.
In GN4, a 'style' is a collection of formatting instructions, and a 'format' is a collection of formatting defaults and styles, something similar to 'theme', that can be used to re-format entire text at once.
You use GN4 formats as a 'theme': to apply defaults and to make available a set of styles.
You use GN4 styles to identify and format the structural elements in your content. So you would use the "Head" style for your title, "Body Text" style for body text, "Caption" style for the image captions and so on.
As said before, a format references a list and content of styles (actually, they are defined on the level of style libraries, linked to the format). This provides a quick reformatting of the styled text too. If the format "A" contains a style "head", that is Times 40pt, boldface, centred, and then you switch to the format "B", that contains a style with the same name "head", but it is Helvetica 60pt regular left aligned, the headline formatted by the style head is automatically reformatted accordingly.
That is possible because only the style names are embedded in text in GN4. These names "read" the formatting attributes from the format.
About styles
There are two kind of styles: character styles and paragraph styles. A character style is a collection of character formatting attributes that can be applied to text in a single step. A paragraph style includes both character and paragraph formatting attributes, and can be applied to a selected paragraph or range of paragraphs.
By default, a new text does not contain any styles (except when auto-insertion of paragraph styles is configured ) and it is formatted by the associated format defaults.
Paragraph styles and character styles are listed on separate palettes.
Styles belong to style libraries that are associated to formats.
See also