It sounds like you're dealing with a document that's Protected against
editing. Without details about the document, what else you can/cannot do &
you're version of Word it's hard to hazard any other guesses or suggestions.
I'm having the same problem (Word 2003) but in my case the drop and drag
works in some parts of the document but not in others. Drop and Drag is
turned on and there are no protections or securities on the document.
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