As far as jEdit is concerned, “paragraphs” are delimited by double newlines. This is also how TeX defines a paragraph. Note that jEdit doesn't parse HTML files for “<P>” tags, nor does it support paragraphs delimited only by a leading indent.

C+UP and C+DOWN move the caret to the previous and next paragraph, respectively. Holding down Shift in addition to the above extends the selection a paragraph at a time.

Edit>More Selection>Select Paragraph (shortcut: C+e p) selects the paragraph containing the caret.

Edit>Text>Format Paragraph (shortcut: C+e f) splits and joins lines in the current selection to make it fit within the wrap column position. If nothing is selected, the paragraph containing the caret is formatted instead. See the section called “Wrapping Long Lines” for information about word wrap and changing the wrap column.

Edit>Text>Delete Paragraph (shortcut: C+e d) deletes the paragraph containing the caret.