Algorithm to generate words

[Milk]

<snip>Phase2:
Then, in the word generator, when all possible combinations of words are generated based on the string inputted by the user (using one of the methods posted in this thread - permutations).
Then, corresponding numerical codes are also generated for this generated words.

Ahh, no. You don't have to generate all the possible combinations (this is the whole point of scoring the words in such a way)

User inputs a string, the string is given a score. Compare this new score to the stored scores. If a match is found then check to see if they both contain the same letter duplicates (if any)

You can be inventive with the various bitwise operators to make more complicated queries, such as using wildcards as in post #13