I downloaded the Office 2013 installer, which was less than 1 MB. I expected the installer to spend a long time downloading additional data before I could start using office. But I was able to start Word, OneNote, etc. within about a minute of starting the installer. What's going on here? Is it streaming the app from the cloud? What happens when I run Office 2013?
You've downloaded the Click To Run version which is based on App-V. This is a streaming based version which has to download all required files from the Internet first when you start it the first time (On demand). if you don't run Word, the files for Word are not downloaded.