acronym. initialism

initialism: an abbreviation formed from initial letters (e.g., CIA, FBI, IBM)

acronym: an initialism that is a word in itself (e.g., NATO, snafu, AIDS)

Addendum (2/7/2024): Here's a sentence from the New York Times:

"FAFSA, S.A.I., N.P.C., C.S.S. — the acronyms never end."

What's the problem? While "FAFSA" is indeed an acronym, the other three — which are not pronounceable — are, strictly speaking, initialisms.

And yet, as Merriam-Webster points out in the entry for "acronym," the word "acronym" is also sometimes used to mean 'initialism.'"

So, is the sentence from the Times ok? It is — though, if you want to find a compromise between being technically correct and understood, you might replace "acronyms" with "abbreviations."