Versioning tools have been around for a few decades, but most people still have the nasty habit to manually version their documents in the likes of report_FINALFINALFINALversion.docx. And I can't blame them—text editing software is often terrible to work with.
Why do we even version documents in the first place? Two reasons: time travel, and collaboration.
First, versioning allows writers to travel back in time. With versions, we can trace every modification brought to a document to either consult or revert them. It's a precious tool when a text is bound to change. You might for example need to rewrite parts of a blog post or trim notes: versioning allows you to keep every past information without having to worry about losing valuable content—no change is definite.
If you write a book, you are likely to share your manuscript with a variety of people: versioning is also a fundamental tool for cooperation. Versions can be analyzed by software tools to compare and merge conflicting changes, without the need to handle them yourself. It's particularly nice as an author when you don't want to go through your own book for the tenth time.
As Karl Popper once said, no book can ever be finished. If a writer needs to create new book editions, having a versioned file is a great way to tell readers what changed and what remained. It's a great way to create trust and develop a loyal audience.