An abbreviation is any shortened word or phrase. It can use the first letter of each word in a phrase, the first syllable of each word in a phrase, or just the first few letters of a word.
An acronym is a specific type of abbreviation that forms a pronounceable word from the first letter or syllable of each word in a phrase. For example, the word LASIK is an acronym for laser-assisted in situ keratomileusis.
An initialism is an abbreviation that uses the first word of each letter in a phrase, but instead of creating a new word, each letter is stated individually. IT, KO, and IPO are all initialisms.