In MS Word bookmark is a feature that allows you to mark some text or location in document so that you can refer it in future. While you are creating document, you may encounter many situations where you’ll need to remember a particular paragraph that requires editing after some time. Rather than noting it elsewhere, MS Word offers bookmark feature by which you’ll save a mark for the passage and find it whenever you need to return to it.
Another use of MS Word Bookmark can be to offer readers an easy way to navigate your document. Having a list of meaningful bookmarks, your readers can jump from one saved location to another quickly without needing to scroll the document.
Similarly, Bookmarks are cross referenced to show the relation between the two different locations in document. For example when you are explaining ‘Bagmati’ and a term ‘Kathmandu’ is mentioned in it’s paragraph. You can cross reference that ‘Kathmandu’ to some other location in document where you’ve explained about ‘Kathmandu’
Thus, in brief, MS Word bookmark is marking and saving it in document so that you can use it in future to jump quickly, create cross references and hyperlinks.