How DOCX Works
DOCX is the modern Microsoft Word document format, and its most surprising property is that a DOCX file is actually a ZIP archive. If you rename a .docx to .zip and open it, you find a small folder structure of XML files inside. This design, called the Open Packaging Conventions, replaced the old binary DOC format in 2007 and is the foundation of all modern Office formats (DOCX, XLSX, PPTX). The document is not one opaque blob; it is a package of readable parts.
Inside that ZIP, the content is split across several XML files joined by relationship files. The actual text lives in word/document.xml, while styles, numbering, fonts, embedded images, and metadata sit in separate parts, and a content-types file describes what each part is. Because the content is structured XML rather than a proprietary binary layout, DOCX is far more open, robust, and recoverable than the old DOC format: a single corrupted byte is less likely to destroy the whole file, and other software can read and write the format from a published specification.
This open, packaged design is also why DOCX handles modern documents so well. Rich formatting, tracked changes, comments, tables, embedded media, and styles all map cleanly onto separate XML parts, and the format is standardized (as Office Open XML), so word processors beyond Word, like LibreOffice and Google Docs, can open and save DOCX with good fidelity.
DOCX vs DOC
The difference is a generational one. DOC is the old (pre-2007) Word format, a complex binary file built on Microsoft's Compound File Binary structure, harder for other programs to read reliably and more prone to corruption. DOCX is the newer ZIP-and-XML format that replaced it, more open, more compact (the ZIP compression shrinks files), and more resilient. For essentially all current use, DOCX is the right format; DOC survives mainly in old files created before 2007 or by very old software.
If you have old DOC files, modern Word and other editors open them fine and can save them as DOCX to modernize them. There is rarely a reason to keep working in DOC, the newer format is better in nearly every respect, and converting preserves the content while gaining the robustness and smaller size of the XML-based format.
When to Use DOCX
DOCX is the natural choice for any document you are still writing or editing: drafts, reports, letters, anything that needs to be changed, formatted, collaborated on, or reflow when edited. It preserves full editability, styles, and tracked changes, which is exactly what a working document needs. When a document is finished and needs to look identical everywhere or be printed and signed, you export it to PDF, the editable DOCX is the working format, the fixed PDF is the delivery format.
Limitations
DOCX's limitations are mostly about fidelity across editors. While it is standardized, complex formatting can shift slightly when a DOCX moves between Word, Google Docs, and LibreOffice, since each interprets some advanced features differently. It is also not a fixed-layout format: text reflows, so it does not guarantee the page-perfect appearance a PDF does, which is why finished documents are exported to PDF. And being editable, it is not the format for distributing a document you do not want changed. For its actual job, editable word processing, these are minor.