Thank you Jim. That article was a lot of work and I think still stands up.
See also Understanding Styles in Microsoft Word.

Make sure you actually have a "template" and not a "document" being used as a pattern. This is Word jargon and not English. Normally one does not open a template to use it. Rather, when you double-click on a template or use it with File > New, you start a new document attached to that template.

Is a new document created from your template set to automatically update styles from the template? With this setting, if your new document, based on your template is unable to find your template, it will update its styles from the Normal template.

See also: What happens when I send my document to someone else? Will Word mess up my formatting?