Initialism

An abbreviation consisting of the first letter or letters of words in a phrase (for example, IRS for Internal Revenue Service), syllables or components of a word (TNT for trinitrotoluene), or a combination of words and syllables (ESP for extrasensory perception) and pronounced by spelling out the letters one by one rather than as a solid word.

Source: The American Heritage® Dictionary of the English Language, Fourth Edition
Copyright © 2000 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.

E.g.:

• ACL
• CIA
• CP
• MD
• MHz

Differs from an acronym in that acronyms can be pronounced and often become words themselves that are then written in lowercase, e.g.:

• GNU
• laser
• NASA
• radar
• scuba