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.
Control-Up and Control-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: Control-E P) selects the paragraph containing the caret.
Edit>Text>Format Paragraph (shortcut: Control-E F) splits and joins lines in the current paragraph to make it fit within the wrap column position. See the section called "Word Wrap" for information and word wrap and changing the wrap column.
Edit>Text>Delete Paragraph (shortcut: Control-E D) deletes the paragraph containing the caret.