You can insert images into your Google Drive documents by using the web uploader, entering a URL, or dragging and dropping from your PC or from another application.
Once the image has appeared in the document, you can resize it and decide how any other text in the document should flow around it.
To resize, drag one of the eight ‘handles’ – the little squares that appear at the corners and midway along the sides of the boundary line – and your image will resize in real time.
You can also control on how text interacts with the images appearing in your documents.
There are currently three layouts available – in line, wrap text or break text.:
In line: The image sits on the current line of text.
Wrap text: Other text flows around the image, separated from the image by the defined margins (see figure below). To set an image’s margins, select this layout and then set the margin size from the drop-down menu.
Break text: Text will not appear to the left or the right of the image, only above and below.
UPDATE July 8th 2014: In Docs, Presentations and Drawings you can now reset your image to its original properties and formatting, or replace the image with another, without losing the layout and formatting you’ve chosen, by using the Replace image… or Reset image options. These have been added to the pop-up menu that opens when you right-click an image: