Hello, thank you for reaching out to Microsoft Q&A.
As a first step,
Close the app from the recent apps section, then restart your iPhone. Once done, open the Microsoft Word app and try creating a new document.
If you are still having issues, open the App Store and search for Microsoft Word. If an update is available, tap Update. After the app is updated, check if you can create a new Word document.
If you are still experiencing issues, I recommend uninstalling and reinstalling the Word app from the App Store. Reinstalling the app will not delete any of your files. Make sure you sign in with the same Microsoft account after reinstalling the app.