The Difference Between a Tab and a First-line Indent in Word.

You can indent paragraphs, or selected text, in your document from the left margin, the right margin, or both the margins. 
Whether you would like to adjust a single line or an entire paragraph, you can set indents and tabs to specific places throughout the entire document.

TABS

Tabs are set to distribute text evenly between the left and right margins. 

By default, every time you press the Tab key, the insertion point will move 1/2 inch to the right.  

You can add tab stops to the Ruler, which allows you to change the size of the tabs.

INDENTS

In many types of documents, you may want to indent only the first line of each paragraph. 

This helps to visually separate paragraphs from one another.

Generally, if the insertion point is at the beginning of an existing paragraph, it will create a first-line indent; otherwise, it will create a tab.