Start by reading the Writer Guide provided by the Document Foundation.
Your question references many notions that need to be put into perspective to each other.
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Outline numbering: this is the sequence counter used to number chapters. In recent releases, its name has been changed to Chapter Numbering. Unless you want to play (dirty) power tricks, let LO writer manage it, it does so quite well.
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Field insertion: they are mainly used for cross-references (e.g. “see chapter x”). In principle they are not used in chapter/section headings as those as supposed to be “primary” independent data.
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Master document: used as a binder to gather several book parts stored as independent files. This is advanced usage fit for really big documents. To begin with LO Writer, put it aside.
Finally, built-in feature for chapter and section headings is based on paragraph style family Heading x with x in range 1 to 10 reflecting the heading level. Then to enter a heading, switch to paragraph style Heading x (or change it afterwards to promote an ordinary paragraph to heading status) and type your text. When you hit Enter, paragraph style automatically revert to Body Text.
Note that chapter numbering is not enabled by default. If you prefer numbered chapters, you must set numbering properties with Tools>Chapter Numbering.
Once again, LO Writer is not a simple text editor but a document processor. It is a feature-rich application. To fully benefit from its power, you must understand its basic underlying principles. For that, read the Getting Started guides, mainly the introduction on styles.
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(Edited to fix typos only)
