A term like “NASA,” formed from initial letters and pronounced as a word, is an acronym.
NASA comes from National Aeronautics and Space Administration and is pronounced as a single word, “nassa.” NATO and laser are other familiar examples. The initial letters represent a longer name or phrase, but the resulting form is convenient to say and remember.
In a strict distinction, an acronym is pronounced as a word, whereas an initialism is pronounced letter by letter. NASA and NATO are acronyms; FBI, BBC, and USA are initialisms. In everyday English, however, acronym is often used broadly for both types, and dictionaries and style guides acknowledge that usage varies.
The word acronym combines Greek-derived elements meaning “tip” or “summit” and “name.” The German form Akronym was recorded in the early twentieth century, and English uses of the term appeared by the 1940s. Acronyms can eventually become ordinary lowercase words: laser began as light amplification by stimulated emission of radiation, and radar came from radio detection and ranging. An acronym is therefore different from an abbreviation in general, because abbreviation includes many shortened forms that are neither initial-letter constructions nor pronounced as words.