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note that Word sorts on the basis of paragraphs in regular text and columns within tables.
So you couldn't sort words within a paragraph. But if you have a list where each item is a separate paragraph you can sort that. Or you might want to use a table.
Now if you are sorting addresses like this:
123 Elm St
anytown NY
321 Oak Lane
sometown NJ
111 Oak Lane
Myvillage NY
Sorting would result in this:
111 Oak Lane
123 Elm St
321 Oak Lane
anytown NY
Myvillage NY
sometown NJ
So to sort both lines of the address together you need to use New Line character (Ctrl+enter) rather than a new paragraph after the first line.