Fontsize is too small
I might as well post my comment to Szabolcs as an answer. As Szabolcs noted, the default screen resolution in Mathematica is set to 72 dpi which might not agree with the actual resolution.
You can change the screen resolution in the Option Inspector which can be found in the Format menu. Set "Show option values" to "Global preferences" to change Front End settings permanently or set it to "Selected Notebook" to apply them to only the current notebook. Then just search for ScreenResolution in the search box. The relevant option is the one called "ScreenResolution" with quotation marks. You can also find it via Formatting Options > Font Options > FontProperties > "ScreenResolution". It's set to 72 by default as Szabolcs figured out.
By the way, I found that on OS X at least, to change a value in the option inspector I need to click on the value and hover over the selection with my mouse cursor for a few seconds until it goes into edit mode, but it might be different on Windows.
You can try out using the system dpi temporarily by evaluating:
SetOptions[$FrontEndSession, FontProperties -> {"ScreenResolution" -> Automatic}]
(This will revert to the previous value after the Front End is closed.)
You do this for the current notebook using
SetOptions[EvaluationNotebook[],
FontProperties -> {"ScreenResolution" -> Automatic}]
Alternatively, If it's just the "Text" style that is too small, you could change the default text font in the style sheet you're using. In order to do this, go to Format > Edit Stylesheet... and type Text in the text field. Select the newly created cell, change the size in Format > Size to whatever you want, and close the stylesheet editor. All text cells in your notebook should now use the updated font size by default.
I noticed that if I set the font size to 96/72 times larger, then I get precisely the same font sizes as in WordPad. (I used WordPad because Word has more advanced text handling and does not usually look the same as other Windows programs.)
The screen resolution on my system seems to be 96 dpi, and Mathematica knows this:
In[1]:= Options[$FrontEnd, ScreenInformation]
Out[1]= {ScreenInformation -> {{ScreenArea -> {{0, 1366}, {57, 768}},
FullScreenArea -> {{0, 1366}, {0, 768}}, BitDepth -> 32,
Resolution -> 96}}}
My conclusion is that Mathematica does not use the system resolution value (i.e. how many pixels the screen has in a unit length), but always renders assuming 72 dpi. I have been looking at differrent Front End options for a while (see Format -> Option Inspector...) but I have not managed to get Mathematica to render with 96 dpi.
Perhaps this is a design decision, for compatibility reasons (and lack of full implementation)? Let's hope future versions will have better support for different dpi values.
As a workaround can change the global magnification factor for the current front end session like so:
SetOptions[$FrontEndSession, Magnification -> 96/72]
This will affect every notebook. To make the change persist after you restart the Front End, use $FrontEnd in place of $FrontEndSession. Unfortunately images will also be magnified (they won't be shown 1:1 to screen pixels), so this is not a really practical workaround.
Note that when exporting to PDF or printing, text is correctly exported at the right point size. I regularly use this to match fonts sizes in figure with the rest of my (LaTeX) document.