In order to do formatting, Google Web Toolkit(GWT) provides a combination of two of its components. One is the RichTextArea and the second is the RichTextToolBar. Both of them allow a user to formatt the text in the way which he want to do ao you can also use it as per your requirement in your java application with GWT. The following code will help you to do this.

Code:

RichTextArea area = new RichTextArea();
area.setSize("100%", "14em");
RichTextToolbar toolbar = new RichTextToolbar(area);
toolbar.setWidth("100%");

Best Of Luck.