From LQWiki

Acronym: a word that is formed from the initial letters of a name, or by combining parts of words.

Examples:

TLD: Top-Level Domain
laser: Light Amplification by Stimulated Emission of Radiation
GNU: Gnu's Not Unix (technically a recursive acronym, since the first word is the acronym)
TLA: Three Letter Acronym
ROFL: Rolling On Floor Laughing