Verify that the AutoCorrect feature hasn't been turned off: In Office button
| Word Options, Proofing category, click the AutoCorrect Options button. On
the AutoCorrect tab of the dialog box, make sure that "Replace text as you
type" is checked.
Also, note that AutoCorrect is language-specific; the title of the dialog
box (when the AutoCorrect tab is active) indicates which language is
currently being used for the text containing the insertion point or
selection.
By the way, what change did you do to the Normal template?