Is it possible to open multiple MS Word documents in one WORD document? How?

This feature has been removed in Office2013.

It isn't really a question of what appears on the taskbar, but rather the behavior of the windows that hold the documents. (Thanks to MS for mislabeling the option and creating the confusion!)

In Word XP,2003,2007, and2010, when the option "Windows in Taskbar" or "Show all windows in taskbar"  is checked and you open multiple documents, each document gets its own set of menus or ribbons and behaves as a completely separate window. (The technical term is Single Document Interface or SDI.)

In those versions, when that option is unchecked and you open multiple documents, there is only one set of menus or ribbons. You can tile or cascade the documents within the main Word window. (The term for this is Multiple Document Interface or MDI.) The fact that there's only one icon on the taskbar is really a side effect, but it was easier to dumb down the option name than to explain the difference between SDI and MDI.

In Word2013, MDI no longer exists, and the option doesn't appear in the dialog.

The interesting part is that Microsoft dropped MDI from Word2000, and the outcry was so loud that they had to put it back in Word XP (a.k.a. Word2002).

Yes if you mean to merge them:1-"Insert" tab allows you to subtly merge documents.2-Locate "Object", press a small triangle next to it, and click "Text from File" from the dropdown menu3-After that, you can select files to be merged into the current document.
By pressing and holding Ctrl to select more than one documents.
(Note: Documents placed at the top will be merged in the first place.
Therefore, please sort and number each target document in case that you want to keep a certain sequence for your documents.
） please follow the below link http://support.microsoft.com/kb/2665750

Yes you can : - “Insert” tab allows you to subtly merge documents.
- Locate "Object", press a small triangle next to it, and click "Text from File" from the drop down menu.
- After that, you can select files to be merged into the current document, by pressing and holding Ctrl to select more than one document.

It is possible but a little awkward.
Go to File > Options > Advanced then look for Display Options, uncheck "Show all windows in the Taskbar" > Click OK.
Only1 document will be left open.
To toggle between word documents, press Ctrl+F6.
Unfortunately it will not be like excel where you can see the worksheets below.
Hope I answered your question.

Each time you use the File Open command you get a new document which goes to a new window.
I agree with the description og Feras Hassan to combine the document.
In case you want to avoid this method simply go to the document.
copy and paste it to the desired position.
Repeat this for all documents until you are done.
Then save it as a combined one file under a new name.
This way all documents will be under one file.
You can do the same with PDF documents and it has a utility to combine all document in the order you want them to appear in the composite document.

If You are looking to merge several word documents in to one file then may I suggest considering linking each file in to a "master document".
This is accomplished by clicking View > Outline > Show Document > Insert.....
Rather than explaining it fully here is a good article: http://www.howtogeek.com/73960/create-a-master-document-in-word-2010-from-multiple-documents/ I suggest you give it a go! Good Luck.

Yes it is possible to display multiple Word document in tabs the same way as Excel worksheets by using third party addins.

No its not possible with single word aaplication .
it will open different document in different word file application.
not in tab form in single word application alike latest browser.

1. Click where you want to insert the text.
2. On the Insert tab, in the Text group, click the arrow next to Object, and then click Text from File.
3. In the Insert File dialog box, locate the file that you want, and then double-click it.

you can also use hyperlink to many files in one document. 

yes it is possible to open multiple MS word to Ctrl n

yes it is possible to jst click the ctrl+n