The word being used for its multiple meanings in the pun is "outstanding." In this context, "outstanding" can mean both "exceptionally good" (as in deserving an award) and "standing out" in a physical sense (as in standing in a field). The dual meaning creates the humorous effect of the pun.
In the pun, "The scarecrow won an award because he was outstanding in his field," what word is being used for its multiple meanings?
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