How can I tap to place my cursor on iPhone for text edit?

In normal usage if word is found to be misspelled by the system, it will highlight the entire word when you tap it and offer the option ribbon, that can get annoying. You can press and hold near the word but not on the word, to bring up the small zoom window and place the cursor exactly where you want it.

click here ➜ Select, cut, copy, and paste text on iPhone - Apple Support

I don’t think what you want is very practical. Your thumb takes up the space of up to 3 words at any given time. As far as the OS is concerned, you may want the cursor between any of the letters, in the 3 word span that you tap.

How should the OS know where to put the cursor? You have approx 15 options with one tap. Hence, hold and drag. Very fast and very efficient.

If you don't like the trackpad option (which is great when you get used to it), you can still tap on the screen to place the insertion point. You just have to do it carefully.

You can also let Apple know what you'd like to see here:

Product Feedback - Apple

I don't find this difficult to do. I tap the line of text I want the cursor to be located on. Then using my finger I swipe in the enter text box to wherever I want the cursor to be exactly. That's a two step process. Not a 3 or 4 step process.