An acronym is defined as, "an abbreviation formed from the initial letters of other words and pronounced as a word", so, in essence, it's just another word, albeit shorter, made up of a bunch of letters, just like all the other words. Designed to make communicating directions and tasks faster, they usually make sense after some learning and studying.
The one part I haven't figured out yet, is, why is 'Acronym' such a long word, and what does it stand for?!?!
Helpful links for acronyms: