Abbreviation stands for shortening a word or a phrase. Both acronym and initalism are forms of abbreviation. In both the cases a word is formed by collecting the inital letters of each word in a phrase. However, in case of acronym, the word so formed is pronounced collectively as a word, whereas in case of initialism the word formed is pronounced by pronouncing each letter individually.
Example of Acronym :
BASIC - Basic All Purpose Symbolic Instruction Code
SONAR - SOund Navigation And Ranging
Example of Initialism
HTML - HyperText Markup Language
CEO - Chief Executive Officer