The area in which the type must appear is set by choosing the Type tool and dragging a rectangle. The cursor will appear in the upper left and typing will stay within the rectangle. You may Copy and Paste from Word if desired, as I have done here, and the typematter will recast to adhere to the box dimensions, font and size specified in the Photoshop Type Options bar. In effect, the box within a larger area defines the margins.
Thank you Norman, but the box disappears after I click in the type layer....
After drawing the rectangle with the Type tool, just start typing. If the rectangle disappears reset the Type tool.