I found two similar tags on this site which are text-processing and text-formatting. But I am little confuse to understand exactly which of them should be used when?
As both deals with Text processing/formatting utilities like: sed, awk, perl, cut, grep, diff, sort etc. why both are exist?
Should one of them be synonyms of another?
I'm not really sure that we need both tags but there is a difference between text-formatting and text-processing. First of all, yes, text-formatting is a subset of text-processing. However, formatting refers to changing a file's format, not to extracting information from it.
For example, this question is about text formatting. The OP has a file in a particular format and wants the same information but in a different format.
I would use text-processing for extracting information from text files (parsing them) and text-formatting for manipulating the way that data from a text file are displayed. As a rule of thumb, if a subset of the information is to be extracted, use text-processing and if only the format, the presentation of the data, is to be changed, use text-formatting (or both).
Please don't assume that this is site policy. This is just my personal take on these tags, feel free to downvote/disagree.
The way I understand the tag name text-formatting spontaneously is that it's about applying formatting to text, such as bold, italic, section titles, line and page breaks, etc.
The tag wiki gives a completely different meaning. I understand it as applying to producing text which has to be arranged in a particular way, as opposed to text-processing which is about reading text and often, but not always producing modified text.
text-formatting isn't on my mental radar, I wouldn't have thought of using it before seeing this meta thread. I'm not sure if I'll be remembering it in the future.
Text processing may involve additional filtering or 'rows'/'cells' transposition etc., which are more than just formatting the text differently from the source.
However, you might still be onto something. Since text-formatting is created much more recently and is more narrow in scope, it may not be too far-fetched to think of it as a synonym to text-processing.
The difference between text-processing and text-formatting is that you might process a text into some other format, such as an image, or a page description (as in pdf or ps), while text formatting formats a text to produce another text in a special formatted way.
So roughly I would say, when you process a text the result might be have any format and encoding or even no visual result at all but some kind of system function, while when you format a text the source and destination formats are plain texts basically.
As both deals with Text processing/formatting utilities like: sed, awk, perl, cut, grep, diff, sort etc. why both are exist?
All those tools are text formatting tools, while text processing tools are tex, roff, metapost, gs.
Of course text-formatting tools are often used to format text for further processing.
