Nearly any language (at least the ones I know) allows compound substantives - A hamster and a cage makes a hamster cage in just about any language. the collective users of the language) decides that word makes sense and is useful, it might even receive a longer lifespan. Those words are normally used as one-timers, dispose-after-use. The capability to combine existing words into new ones, however, comes in handy at times when you realize you have no word that just fits what you are trying to say - Just make up a new one on the fly by combining substantives, add a fitting prefix or adjective. It is also normally considered bad style to use overly long words (The groups that care the least are jurisdiction and public administration, normally.). Such monsters are hard to tame, however, so no one would actually do that. So, in theory, you can always make an existing word a bit longer by just adding another prefix or substantive - In a mathematical sense, that would mean the length of words is unlimited. There is definitively no rule other than practicality that limits the length of a German word. Thoroughly recommended to anyone learning German - You might recognize some of your own struggles)

(The lore might probably go back to Mark Twain's essay The Awful German Language, a satirical revenge of a frustrated learner to the language. In day-to-day use, we probably have no (or only slightly) longer words than any other major language. There ist that lore about the German language that might make it look to bystanders as if German conversation would be attacking each other with monster word constructs of massive length.

Long german words in english