An acronym is an abbreviation that becomes a word, i.e. it is made up of one or more syllables and can be pronounced as a word rather than separate initial letters. The word is formed by using the first letters of the words comprising a longer phrase.
UNESCO and NATO are examples of acronyms. When originally coined, the whole acronym is usually written in block capitals, but once it has become part of Standard English, it is usually written with only the initial letter as a capital, if at all: UNESCO = Unesco, sonar, and so on. Occasionally, to make the acronym pronounceable, more than the first letter of a word is used, e.g.: radar from "RAdio Detection And Ranging" where the first two letters of "radio" are used.
The world of TEFL is rife with them.
A useful resource with a list of acronyms in general can be found at The free dictionary.