Typography guru Jan Tschichold on indenting paragraphs:
The indent of the paragraph should be the em of the fount body.
Omit indents in the first line of the first paragraph of any text and at the beginning of a new section that comes under a sub-heading. It is not necessary to set the first word in small capitals, but if this is done for any reason, the word should be letter-spaced in the same way as the running title.
If a chapter is divided into several parts without headings, these parts should be divided not only by an additional space, but always by one or more asterisks of the fount body. As a rule, one asterisk is sufficient. Without them it is impossible to see whether a part ends at the bottom of a page or not. Even when the last line of such a part ends the page, there will always be space for an asterisk in the bottom margin.
Of course, the web is in the process of killing off the indented paragraph. But not everywhere. Some examples of indenting can be found at the following sites:
Even back in the day, these rules were often ignored. Why? According to Tschichold, it was because typists were trained by business schools, who were “utterly incompetent when it comes to questions of typography.”
The perfect book and page
Tschichold also came up with a system for the perfect book and the perfect page. Yes, perfect.
No matter the page size, you will always end up with a 9×9 grid, with the textblock 1/9th from the top and inside, and 2/9ths from the outside and bottom.
It all goes back to the Golden Ratio:
The page ratio is best at 2:3…His reasoning was that it sits within the Fibonacci Sequence, as well as the Golden Ratio, and establishes that the textblock will be harmonious and proportional to the page — it’s how the height of it equals the width of the page.
Here’s an example layout:
More details/examples at The Secret Law of Page Harmony.
Related: Tschichold and the golden section [Wikipedia]