An acronym is a word created from the initial letters of a phrase: for example, Random Access Memory becomes RAM, pronounced as the word "ram". Note the distinction between acronyms and initialisms: strictly speaking, one uses the term acronym only when the initials are pronounced as if they compose an actual word, though the term "backronym" is often used less precisely and applied to back-formed initialisms as well as back-formed acronyms.
A backronym is created when one constructs a phrase that has as its acronym an existing short word. There are both official and generally serious, as well as unofficial and often humorous backronyms. When a backronym is peddled as the origin of a word, it is often an example of false etymology; when widely believed, it may have the status of a folk etymology; but more usually it is intended and understood as a joke as in: BASIC, is a programming language with an acronym--"Beginners All-purpose Symbolic Instruction Code" but, a backronym mostly in the hacker community has jokingly come to stand for "Bill's Attempt To Seize Industry Control".