var p = $('p');

p
 .html(function(index, oldHtml) {
    return oldHtml.replace(/\b(\w+?)\b/g, '<span class="word">$1</span>')
 })
 .click(function(event) { alert(event.target.innerHTML) });

I took Pablo Fernandez's suggestions into account.

See it on jsFiddle.

Update

So, will this be performant (e.g., it won't freeze up a slow user's browser?) Also, could you elaborate about how event.target works?

It may very well slow the performance of a page with 30,000 words. I'd argue that is excessive and probably would benefit from being paginated, but I don't know your exact circumstances.

event.target property holds the element that started the event - the event bubbles up / propagates to its parent, which then handles the event, so you don't have 30,000 events on separate span elements.

Unfortunately I think you'll need to process the text and put a <span class ='clickableWord'> YOUR_WORD </span> around every word.

Then:

$(".clickableWord").click(
             function(this){alert(this.text());}
                         );

Any method that tries to use absolute positioning to locate the word is liable to problems with zooming, font sizes, etc.

It's been addressed here Getting text at clicked location in an HTML element

Is there HTML doc static or are you generating it? If you are generating it then it shouldnt be too tough to add those tags around each word.

If you need to do it to an existing HTML after the fact then this is a little harder. Pick the elements (probably div or p) that contain most of the words and read these words into an array. Then re-output them followed by those span tags

I'm a little late to the party I see.

Try this one out.

<div id="text"><!-- text --></div>

init()

function init()
{
    addListeners();
    adjustText(document.getElementById("text"));   
}

function addListeners()
{
    document.body.onclick = clicked;   
}

function adjustText(holder)
{
    text = holder.innerHTML.split(" ");
    holder.innerHTML = "";
    for(var i=0;i<text.length;i++)
    {
        text[i] = text[i].replace("\n", "");
        var newText = document.createElement("span");
        var leadSpace = document.createTextNode(" ");
        var endSpace = document.createTextNode(" ");
        newText.innerHTML = text[i];
        holder.appendChild(leadSpace);
        holder.appendChild(newText);
        holder.appendChild(endSpace);
    }
}

function clicked(evt)
{
    if(evt.target.tagName == "SPAN" && evt.target.innerHTML)
    {
        alert(evt.target.innerHTML);
    }  
}

http://jsfiddle.net/AdwCA/2/