Software

What is software again?
Everything on the computer that you cannot touch physically is software, right?
I bought a plain computer without any software on it at ebay. What can I do with it? What can I do with it if at least an operating system is included?
What is the difference between Windows and Word?
What does an operating system do anyway?
Where is the software physically located?
What are the categories of software?
Application software can also categorized by the task it performs. What categories are known here?