The Romans were living in the immediate aftermath of Pentecost, so prophecy was still present. This was mostly something that looked like the preaching of our own day (e.g. Acts 15:32), but there were miraculous elements to it (e.g. Acts 11:27-28). Unlike us, the whole of the New Testament had not yet been completed, so they were direct examples of revelation given by the Holy Spirit for the church. Men and women in the church would share with the fellowship things that the Holy Spirit had told them (e.g. 1 Corinthians 11:5). Paul says that if that is your gift, then you need to use that gift in accordance with your faith, going back to what he said in verse 3 about each person being distributed with faith in different measures. Some would be doing much more prophesying than others, but either way, however much faith had been given to do that prophesying, they needed to do it.
In verse 7, he talks about service as another kind of gift. It’s very simple: if they’d been given the gift of serving, then they needed to serve. The word here is the word that we get the word “Deacon” from. The word “Deacon” means servant, and though the Bible speaks elsewhere of the specific office of Deacon, it also speaks of a more general deaconing that is to be done by more people than just those with the office of Deacon—by anyone who is willing to practically serve others, bringing food, helping the sick, bringing things to places—any number of things like that.
He mentions teaching as well at the end of verse 7, a separate thing from prophesying. It’s more methodical, more educational, more to do with dissecting and applying information to individuals—sometimes done on a one-to-one basis, sometimes in a more public setting. Most prophesying would have involved teaching, but not exclusively, and it was possible to teach without prophesying.
Then, in verse 8, he speaks of encouragement. This was a gift that people like Barnabas especially had—coming alongside people and setting their focus on Christ, cheering them up when they were downcast, and, as well as rebuking them, helping them refocus when they were losing sight of Christ.
The middle of verse 8 shows us that some had the gift of giving. Some people are just disposed to being especially generous. Those people were to give generously.
Then, others were called to lead, to be managers, to be those who pushed forward and took others with them. They were to do it diligently.
Finally, some were called specifically to works of mercy, especially in dealing with people who had, in more obvious ways, sinned against God and perhaps, by extension, sinned against the church. But they were to overlook those sins as these people came to God with repentance. They were to help people who perhaps felt shame for their sins, rightly so, but they had now been delivered so they needed to be shown mercy. Sometimes, this work of mercy was enough to get them down, but those who showed mercy to others were not to do it in a down-in-the-dumps kind of way. They were to do it cheerfully.