How does it work?
A document is divided into passages, each embedded and stored separately. At query time, whole chunks come back — so a chunk is simultaneously the unit of search and the unit of context. The naive approach splits every fixed number of characters. Better approaches split on structure: paragraphs, sections, headings, or whatever boundary the document already has. As a starting point rather than a rule, chunks of roughly 200 to 800 tokens with 10 to 20 per cent overlap suit most prose; tune from there against your own retrieval results.
Overlap means repeating the tail of one chunk at the head of the next, so a sentence spanning a boundary appears whole in at least one of them.
