Computer software are divided into to classes - system software and application software.
All those computer programs that are created for the purpose of computers; the programs that will manage the computer resources and other programs for smooth operation; the programs that will get executed by the operating system itself should be considered as system software. System software has nothing to do with the requirements of users directly. They do not care if user needs to create documents, or do some calculations or play audio/video materials. All they care is to manage machines and facilities so that user will feel easy to run his applications and do his work.
Operating systems, utilities, device drivers, programming languages and language processors (assemblers, compilers and interpreters) are the examples of system software.
Because Microsoft Word does not fall in this category; because it is not a program for operating system or it is not the software to manage hardware devices, Microsoft Word is not a system software.
Application software are the group of computer software that are created to help users do their required tasks. Application software are the ones that makes computers helpful and useful devices. The software to create documents, perform calculations, store and manage data, play audio/video clicps etc are known as application software.
Now, are you still confused about is Microsoft Word a System Software?
Microsoft Word is used to create documents such as letters, thesis, reports, books and so on. It is bundeld in Microsoft Office Suite. So it is better to classify it as Packaged Application Software.
Application software can be of two types - Packaged and Tailored. The software that are designed to solve the common problem of masses, which are created by software copanies to sell it to the general public are considered to be packaged software. In other side, the software designed to solve specific problem of some specific individual or organization is tailored software. A software developed to manage the file system of ABC company is obviously tailored software.
So, this should answer the question "is Microsoft Word a System Software?". You are welcome to connect with me in Facebook and discuss on this topic if you feel required. Add me as your friend in Facebook - http://facebook.com/shkhanal is my facebook profile!