Tip: the count without spaces is the number most online forms and character limits actually apply.
Word counting is not a standardised operation, which is why a document can be 499 words in one program and 512 in another. The differences come from a handful of decisions that each tool makes differently: how hyphens are treated, whether numbers count, whether a stray “—” surrounded by spaces becomes a word of its own, and whether the text was pasted with non-breaking spaces still in it.
A word is a run of characters between spaces. So well-known is one word, state of the art is four, and e.g. is one. This matches the convention used by word processors and by most publishing platforms, which is what makes the number portable when you hand a draft to someone else.
Both numbers matter, for different reasons. Limits written by engineers — SMS at 160, a database column, an API field — are applied to the string as stored, so every space is counted. Limits written by editors — a meta description that must not be truncated, a headline — are usually judged visually, and there the number without spaces is often the more useful estimate of how much room the text actually occupies.
Silent reading for adults averages roughly 200 to 250 words per minute, and reading aloud runs around 130 to 150. The figures in the panel use the conservative end of both ranges, 200 and 130, so the estimate errs towards the text taking longer — the more useful direction if you are planning a video or a talk. Dense technical material reads considerably slower than fiction, so treat the number as a starting point rather than a promise.