Instead of setting itemindent
, you can change the values for leftmargin
and labelindent
:
\documentclass[letterpaper]{article}
\usepackage{fullpage}
\usepackage{amsmath,amssymb,amsthm,enumitem}
\begin{document}
To convert from general form to standard form, we will follow these steps:
\begin{enumerate}[leftmargin=*,labelindent=16pt,label=\bfseries Step \arabic*.]
\item Ensure the coefficient of the terms in $x^2$ and $y^2$ are 1 respectively.
\item Group the terms containing $x$ and $y$ respectively. Move the constant to the RHS.
\item Take half of the coefficient of the linear terms in both $x$ and $y$, square it and add it to both sides.
\item Rewrite the result in factored form.
\end{enumerate}
\end{document}

In fact, if some of your lists will have 10 or more items, the following settings would be preferable:
\documentclass[letterpaper]{article}
\usepackage{fullpage}
\usepackage{amsmath,amssymb,amsthm,enumitem}
\begin{document}
To convert from general form to standard form, we will follow these steps:
\begin{enumerate}[labelwidth=1.5cm,labelindent=10pt,leftmargin=2.2cm,label=\bfseries Step \arabic*.,align=left]
\setcounter{enumi}{8}% just for the example
\item Ensure the coefficient of the terms in $x^2$ and $y^2$ are 1 respectively.
\item Group the terms containing $x$ and $y$ respectively. Move the constant to the RHS.
\item Take half of the coefficient of the linear terms in both $x$ and $y$, square it and add it to both sides.
\item Rewrite the result in factored form.
\end{enumerate}
\end{document}

With the help of the layouts
package and the following simple code
\documentclass{article}
\usepackage{layouts}
\begin{document}
\begin{figure}
\listdiagram
\caption{List parameters}
\end{figure}
\end{document}
you get a diagram showing the various lengths associated to a list:

the enumitem package adds another parameter \labelindent
for the blank space from the margin of the enclosing list/text to the left edge of the label box. Here's the dependencies between the relevant horizontal parameters:
\leftmargin + \itemindent = \labelindent + \labelwidth + \labelsep
Only modifying itemindent
changes the indention for the first line of the first paragraph of each \item
, and this produces the undesired result in your example code; modifying leftmargin
changes the indention for all the lines. Compare the results in this simple example:
\documentclass{article}
\usepackage[showframe]{geometry}
\usepackage{enumitem,lipsum}
\begin{document}
\begin{enumerate}[itemindent=3cm]
\item text
\item \lipsum[2]
\end{enumerate}
\begin{enumerate}[leftmargin=3cm]
\item text
\item \lipsum[2]
\end{enumerate}
\end{document}
