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The term is acronym or word acronym. In a narrow sense, an acronym is differentiated from an initialism, which is pronounced letter by letter.
Merriam-Webster's Dictionary of English Usage (1994: 21):
A number of commentators (as Copperud 1970, Janis 1984, Howard 1984) believe that acronyms can be differentiated from other abbreviations in being ...
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