Like the aforementioned Sheets app, Docs has also been broken out of the Google Drive app. Docs is pretty anemic in terms of formatting and design power, but it does have most of the basic formatting tools. Considering that most people aren't going to be using Docs for budgeting or inventory tracking, it's a little more forgivable and it's lighter on features. There are plenty of apps that try to nestle right between the power text editors like Markdown and the full fledged word processors. Docs sits closer to the word processing side of the spectrum, but you won't find many of the more complex formatting tools. Docs is for writing up a quick draft, not working on your final thesis.
Also like Sheets, Docs gets its power from collaboration tools more than app features. The live collaboration and comment system is intact here, and the native app has better responsiveness compared to the web app. Having the Drive app as the single place to handle all your Google documents is where this app shines. The Docs app (and Sheets for that matter) doesn't do well with folders, relying instead on a big list of your files and a search bar. Organizing your documents can be a nightmare.
What's Good: Excellent collaboration tools.
What Sucks: Missing advanced editing features. Worse file handling.
Buy it?: If you work on documents with a big group, you're likely already using Google Docs. If you aren't, check it out for free on the App Store.