The u key triggers the undo command, which reverts the most recent change.
i{insert some text} constitutes a change.
From the moment we enter Insert mode until we return to Normal mode, everything we type (or delete) counts as a single change. So we can make the undo command operate on words, sentences, or paragraphs just by moderating our use of the <Esc> key.
If I’m in Insert mode with my cursor at the end of a line, the quickest way to open a new line is to press <CR>. And yet I sometimes prefer to press <Esc>o just because I anticipate that I might want that extra granularity from the undo command.
When I said that the undo command would revert all characters entered (or deleted) during a trip into Insert mode and back, I was glossing over a small detail. If we use the , , , or cursor keys while in Insert mode, a new undo chunk is created. It’s just as though we had switched back to Normal mode to move around with the h , j , k , or l commands, except that we don’t have to leave Insert mode. This also has implications on the operation of the dot command.