Words of power are crafted by the player and are one-time use items of varying usefulness and power.
Crafting Words of PowerEdit
Words of Power can be crafting at a cooking fire. Once crafted, a message will appear with a unique Word of Power and a brief description of it's ability. (For example, 'Twimjot', 'Fledbydpal', or 'Chruggomdye'. The're gibberish, but not completely random letters, so you can kind of figure out how they would be pronounced.) Their effects range from strong buffs to potent debuffs to killing yourself instantly, turning into a harmless animal, and a large number of other random effects.
It is advisable to write down learned words of power in your quest notebook.
One interesting thing about Words of Power, though, is that this is a shared resource. There are (say) 10,000 active words in the universe and it's possible for two players to research the same one (but unlikely, given the large number of them). Once anybody says a word of power, it stops being a word of power. So it doesn't make sense to hoard too many words at once -- eventually somebody else will discover your words and use them before you get a chance to!
Using Words of PowerEdit
Words of Power are used by typing the word into chat. It is advised to do so in /Nearby or /Group chat. The Word of Power will take immediate effect and no longer be usable until researched/crafted again.