Acronyms and Initialisms
There are a collection of terms which are often used interchangeably and yet do have subtle differences. An abbreviation is the most general umbrella term for any shortening of a word, for example Rd is an acceptable abbreviation of road even though the letters aren't both from the start of the word. Similarly, Dr is an abbreviation for doctor, as would Doc, MD, PHD and the like for different uses of the word. These are very much appreciated by Cryptic Crossword fans.
Acronyms are shortenings which take the letters from the start of words and use them to form a pronounceable word. For example NATO (the North Atlantic Treaty Organiz(s)ation) is pronounced as a word rather than reading out the letters as is Scuba (self contained underwater breathing apparatus). Notice that as these words get more accepted we stop capitalising them and eventually forget that they are anything but words in their own right. Laser (Light Amplification by Stimulated Emission of Radiation) and Radar (RAdio Detection And Ranging) are often in this category.
By contrast, initialisms are shortenings where the starts of words are taken but the end result isn't read as a single word. There are far more of these: USA, BBC, HSBC. Most company names fall into this category.
Of course, with all things built on human structures such as language, there are lots of grey areas. In general the word acronym is the safest option for these misfits. For example we have the words that can be pronounced as either a word or as letters. The SAT (SATs in the UK) is mostly a distinction made by which side of the pond you grew up on. Wikipedia puts FAQ in this category which confuses me. How would you even pronounce it as a word? Fack maybe?
Then we have the abbreviations that are partially read as words and partially as letters. There are lots of these in the world of computing: CD-ROM and JPEG are common examples.
However my favourite are the multilayered acronyms: those which are acronyms where one of the words is an acronym itself. These are often done with humour involved. The popular open source competitor to Photoshop GIMP stands for GNU Image Manipulation Program. GNU itself is a recursive acronym which stands for GNU’s Not Unix. Here’s another one from the words of GNUs: HURD stands for HIRD of Unix-Replacing Daemons. HIRD is an acronym which stands for HURD of Interfaces Representing Depth. If you like this sort of thing then I would recommend Godel, Escher, Bach which is full of this sort of thing.