Allegories are regarded as a literary genre and sometimes as an artistic device use to portray something in a symbolic way.
In literature, is sort of a metaphor where "<em>that something</em>" is used to convey a message with an extensive, deeper or general scope.
They are generally applied with a moral connotation or for political purposes, sometimes carrying a spiritual meaning, or simply related to real world issues.
The story of <em>"Young Goodman Brown"</em> about someone's internal conflict, strong feelings and impulses is an example of allegory as an analogy of the strife between good and evil.
What would happen to writing if paragraphs didn't exist is that when the reader reads the writing, he/she might skip a sentence or even get confused. And then you might not understand it yourself. It can affect the reader by not understanding what is going on in the writing if it's a story.
