Question

Is the   (idghaam) only when the two letters are in two different words side by side i.e. one at the end of the first word and the other at the beginning of another?

Answer

It actually depends on the type of (idghaam), and which letters are merging.  If the idghaam occurs with the first letter being   saakinah, then it can only occur when the  saakinah or tanween (which only occurs at the end of a noun) is the last letter on a word, and the letter it merges into is the first letter of the next word. The following are examples of idghaam noon saakinah and tanween: , and in .  When there is a   saakinah followed by one of the letters of idghaam in one word, the saakinah is read clearly, or in other words, the noon is read with .  An example of this is in the word, . 

In other cases both the merged and merged into letters (the two letters of the idghaam) can be within one word, for example the  and in,  , or they may be in two different words, but next to each other, such as the  in .  An idghaam occurring within a word is much less frequent than the idghaam between two words.