MS gave Word away.
I don't remember MS ever giving word away except at events, as they still do with much of their software. If anything it was darn expensive.
The reason Word won, has more to do with WordPerfect than Word. Wordperfect was THE DOS editor everyone used. But it was a real PITA, without the keyboard overlays it was impossible to learn to use. Oh, and formatting your output was a nightmare of control codes sprinkled all over the text which visually bore no resemblance to the output. To enjoy a modern version of the experience you could try TeX in emacs on a 80x25 terminal...
So, along comes word for windows, and its WYSIWYG (for the most part), and pretty much overnight everyone was like wow that rocks, except for a few die hard wordperfect lovers. Wordperfect responded to word for windows by writing the ugliest VGA application possible (version 6 BTW) which came out a good year or two after word for windows 2. It bombed because it was both SLOW and BUGGY and the WYSIWYG function was barely better than the print preview function they had in 5.1 aka, it was more like WYSIWY Might Get.
Meanwhile, windows was getting better, you could buy accelerated 16 bit video cards,etc and with each video card release windows apps looked better and ran faster. Plus the printer functions in windows were maturing and you could get nice fonts/etc for windows and print them on basically any printer. Unlike wordperfect which had limited fonts and printer support.
Eventually word 6 was released, which was a very nice piece of software and pretty bug free. By the time wordperfect came out with an even buggier windows version it was game over for them. Word was stable, fast and quite usable on windows.
The only real competitor at the time was Ami pro which didn't waste any time bringing a windows app to market.