To save time, many industries and organizations abbreviate their names by extracting the first letter of each word in the full name. It also makes logos much shorter and easier to handle, and it's appreciated as a shortcut by news organizations when reporting.
Most of us simply use the word acronym to describe such word constructions. Acronym comes from two Greek word parts. The acro- part in this word can be translated as tip or outermost, and the -nym means name or word. So an acronym is a word created from the first letter of each word in a phrase or title.
But there's a more technical distinction that not everyone knows about. In everyday communication it doesn't really make much of a difference because people know what you mean, but when accuracy is needed, there are two distinctions to be made. These distinctions are based on whether the word thus created is pronounced as if it were a word. or must be spelled out letter by letter.
If the abbreviation can be pronounced as if it were a word, it is properly called an acronym. Some examples are NATO (North Atlantic Treaty Organization), PIN (personal identification number), LASER (light amplification by stimulated emission of radiation), RADAR (radio detecting and ranging), AWOL (absent without leave), POTUS (president of the United States), and STEM (science, technology, engineering, and mathematics).
But if the abbreviation cannot be pronounced as if it were a word, but has to be spelled out letter by letter, it is properly called an initialism. A few examples include FBI (Federal Bureau of Investigation), CFO (chief financial officer), ATM (automated teller machine), DIY (do it yourself), NBC (National Broadcasting Company), PR (public relations), and NFL (National Football League).
Now, in spite of some of the phony stories that you'll find on the internet, acronyms and initialisms did not become common until the late 1800s. One bogus story that I have run across is that when fertilizers such as manure were stored low in the hold of a ship and became waterlogged, they would release methane gas and eventually explode. To prevent this, the bundles were stamped with the letters S.H.I.T., meaning Ship High In Transit, and that's where we obtained our vulgar word. In fact, the word goes all the way back to Old English, where shit -- with a slightly different spelling -- meant diarrhea in cattle.
And no -- fart does not come from foul air released transactionally.
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