The readme.txt file uses a wiki-like syntax, with the number of equal signs (=) indicating the level of each section header. The first and most important section is the header, which contains important information, such as the plugin's name, the author's https://wordpress.org username, donation link, search tags, supported versions, along with a one-line description of its functionality. This last item will always be visible as users navigate through your plugin's pages.
The initial header is followed by multiple sections, which correspond to the various sections that appear within a plugin's display pages. More specifically, these sections contain a complete description of the extension's capability, a step-by-step guide to installing and using your work, a change log containing a list of all the versions with a summary of changes for each of them, frequently asked questions, and screenshots. It is also possible for plugin authors to create their own arbitrary section using the same syntax.
As with the standard wiki syntax, the repeating 1. in front of each installation step will be converted to incrementing values when the system displays these bullets using an ordered list on the live website. Finally, if screenshots are listed in the readme.txt file, the https://wordpress.org website will search for files whose names start with the keyword screenshot-, followed by a number corresponding to the values listed in the screenshot section, and display them with the associated text as a legend. When taking screenshots of your plugin in action, make sure that they are clear and meaningful, as visitors will often decide whether they will download your creations based on these images.
You can find more details about the readme.txt file format in the https://wordpress.org plugin handbook (https://developer.wordpress.org/plugins/wordpress-org/how-your-readme-txt-works/).