I have a mail merge datasource which is in htm/html format and it contains 70 fields. Since there is a limitation of 62 fields for such datasources(Reference). Is it safe to change the datasource type to OLE DB database file in the confirm datasource dialog when selecting the datasource?
When you choose the "All web pages" type (and this is the default type in the case of an HTML file), you are in essence choosing a Word internal file converter to retrieve your data. The reason you end up with the concatenated columns is because
If your HTML file actually contained (say) 1 paragraph of 70 comma-delimited values for each row of data, rather than an HTML table row with td cells, Word would end up treating the data as 70 separate columns (but it would also probably ask for the column delimiter every time you used the file, and you would have to ensure that commas in the data were correctly quoted.
In general, when you choose the "OLE DB Database Files" option, Word either knows of an OLE DB Provider type that can read the specified type of file, or it won't be able to read the file. In this case, what it tries to do is read the file using the Jet OLE DB provider (or in recent versions of Word, the ACE OLE DB provider).
The Jet/ACE providers are one of the mechanisms used to read Access .mdb/.accdb data, but these providers can read a number of formats such as Excel workbook data and plain text file data, using a number of what Jet/ACE calls "Installable ISAMs (IISAMs).
Since there is an IISAM for HTML format data, Word will try to get the data using that IISAM.
In that case, as long as the IISAM can actually read the HTML (it may not be able to read more modern versions of HTML very well) it works much more like the case where Word gets data from Excel. For example, if your HTML file contained two tables, you may get to choose which table to read, cf. an Excel workbook with multiple worksheets and perhaps named ranges.
Jet/ACE IISAMs generally do not support more than 255 columns. 70 shhould be fine. However, you may need to verify what the HTML IISAM does about
Other than delimited text files which will let you go over theat 255 limit if they are read by the internal converter, the only data source I know that will let WOrd see thousands of columns is SQL Server. Other servers with OLE DB providers such as MySQL might allow that too. If you have to use a very large number of columns, be aware that you may not see all the available field names in the relevant dropdowns in WOrd, but you should be able to insert the MERGEFIELD codes in manually in the usual way.