Words
A word is a run of letters, digits or marks, so hyphenated and apostrophised forms (“state-of-the-art”, “don’t”) count once. Standalone punctuation never counts as a word.
Characters
Characters are counted as user-perceived graphemes, which means an emoji or an accented letter counts as one, not two. Both totals — with and without spaces — are shown because platforms differ in which one they enforce.
Sentences and paragraphs
A sentence ends in a period, exclamation mark, question mark or ellipsis and must contain at least one word. A paragraph is any block separated by one or more blank lines.
Limits
Up to 500,000 characters are processed in a single pass. Past that you get a clear warning rather than a silently truncated count.