Compounding is a process of word formation that involves combining complete word forms into a single compound form. Dog catcher, therefore, is a compound, as both dog and catcher are complete word forms in their own right but are subsequently treated as parts of one form.

Derivation involves affixing bound (i.e. non-independent) forms to existing lexemes, whereby the addition of the affix derives a new lexeme. The word independent, for example, is derived from the word dependent by using the prefix in-, while dependent itself is derived from the verb depend. There is also word formation in the processes of clipping in which a portion of a word is removed to create a new one, blending in which two parts of different words are blended into one, acronyms in which each letter of the new word represents a specific word in the representation i.e. NATO for North atlantic Treaty Organization, borrowing in which words from one language are taken and used in another, and finally coinage in which a new word is created to represent a new object or concept.

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