I understand that a lot of people know how to use this feature. However, when I first started I did not know how to do this and it is very important for any author to be able to do this.
To track changes in your own work, you click on tools "track changes" and then make sure that "Highlight changes" is selected in the box. If you have .docx I think it is located under editing - but if you have the "starter" version of the latest MS Word you will not be able to access the feature. I prefer the old MS Word, so I only have the .docx starter. (I am thinking about upgrading but I hate 2013, so I want an older version than that.) Everything you do to change the document will be visible (if you delete a line will go through it; if you add it will appear in the color your chose).
If you receive a document with changes tracked and you want to accept or reject them: Under the "tools" menu in Word, you should see a "track changes" icon. Under that you need to select "accept or reject changes" and make sure "highlighted changes" is selected. Then you can just click "find" and it will find the next change I made in the document, and you can click "accept" or "reject" for each one. You also need to uncheck the "highlight changes" box if you are going to keep working on the document.
Alternatively, you can right click on each change in the document and "accept" or "reject" should appear as one of your options. This is sometimes hard to do if the editor has only changed one letter or added punctuation.
Comments are found under the "insert" menu. (Also not available in Starter.) These are actual information about your story. A person can leave you a note directly in text. The text they are talking about becomes highlighted and when you pass your cursor over it you can see the note. Again you can right click to get rid of it. You can also use these to make notes to yourself.
Similarly, you can add comments to PDF files. If you pay big bucks for the upgrade, there are additional options for editing.