Acronym and Initialism

Acronyms and Initialism are abbreviations that are formed using the initial components in phrase or name. These components may be individual letters (as in CEO) or parts of words (as in Benelux). There is no universal agreement on the precise definition of the various terms, nor on written usage.

While the word abbreviation refers to any shortened form of a word or phrase, some have used initialism to refer to an abbreviation formed simply from a string of initials. In 1943, Bell Laboratories coined the term acronym as the name for a word created from the first letters of each word in aseries of words (such as sonar, created from sound navigation and ranging).

Examples

Pronounced as a word, containing only initial letters

AIDS: acquired immune deficiency syndrome
ASBO: anti-social behavior order
NATO: North Atlantic Treaty Organization
Scuba: self-contained underwater breathing apparatus

Pronounced as word, containing non-initial letters

amphetamine: alpha-methyl-phenethylamine
Gestapo: Geheime Staatspolizei (secret state police)
Interpol: International Criminal Police Organization
Radar: radio detection and ranging

Pronounced as a word or names of letters, dependind on speaker or context

FAQ: frequently asked questions
IRA: .(1) Irish Republican Army pronounced as separated letters
.(2) Individual Retirement Account pronounced as a word

Source: http://en.wikipedia.org/wiki/Acronym_and_initialism