It is hard to say exactly what went wrong. Your word document evidently has some additional codes in there that ended up resulting in line breaks or paragraph breaks. Don't know what version of word you are using, but in your options somewhere there should be an option to show all formatting marks. That might give you some idea of what went wrong.
As far as solutions, if you are familiar with word, you should be able to fix it on that end. If not, the easiest solution, I think, would be to convert it to a raw text format (save it as such or copy it to notepad). That should get rid of any extraneous codes, then you can copy the plain text file into your hub.
The other option would be to edit your hub. If you go into your text capsule, there is a button on the bar to the far left that says "HTML". Clicking on that will show you the html code for your text. What you are likely to find is either a bunch of line breaks < br> or paragraph breaks < / p>. The paragraph break will end the line and add a space between other content. The line break tag just breaks the line but sometimes you'll see two of them together < br>< br> which will break the line and add a space.
Please note that those tags don't actually have spaces in them, there just isn't any way (that I know of) to write them here without them being interpreted as code.
What you want is to surround entire paragraphs in a single set of paragraph tags.
< p>paragraph 1 text goes here< / p>< p>paragraph 2 text here< / p>
Text in those paragraphs will be single spaced and there will be a space in between the two paragraphs.
Also, you missed an "o" in your title.