Tray selection in the windows printer folder is the
default selection for the physical printer , this is where
you set the paper size according to what is loaded in the
printer trays/cassettes.

Tray selction from word is where you choose what paper you
need to print onto depending on what is setup under the
windows printer properties as mentioned above, this also
depends on what printer is set as the default printer
under the Windows printer folder in the case of more thna
one choice of printer.
depending on the printer you have , also depends on how
many trays choices you may have, some printers can have
anyhting from 1 tray to 6 trays for example.
Normally MSWord controls the printer trays but that can
depend on what printer manufacture you may have.
This information is general as i don't know what type of
printer you have.
Hopefully it will shed some light on how it all works, so
to recap first make sure the default printer properties
are setup correctly this often is not the case and causes
more problems than you can manage.