Unlike abbreviations,acronyms consist of the first letters of several words. In contrast, abbreviations do not necessarily have to consist of the initial letters. These two examples illustrate the difference: The acronym TLI stands for Transport Layer Interface, while the abbreviation ABX stands for Advanced Branch eXchange. Whereby the "X" is not the initial letter of Exchange.
Just like 3-letter acronyms, there are 2- and 4-letter acronyms.