Which term is used for words that are formed using the initials of multiple words?

The correct term for words that are formed using the initials of multiple words is "acronyms." Acronyms are typically created by taking the first letter of each word in a phrase to form a new word, which is then pronounced as a single word. A common example is "NASA," which stands for the National Aeronautics and Space Administration. This process allows for easier communication and often makes lengthy organizations or phrases more manageable to refer to.

In contrast, homophones are words that sound alike but have different meanings or spellings, such as "flour" and "flower." Eponyms are words derived from the names of people, usually to commemorate their contributions, for instance, "Sandwich" from the Earl of Sandwich. Synonyms are words that have similar meanings, like "happy" and "joyful." Each of these terms serves a distinct function in language, differentiating them from acronyms, which specifically relate to the formation of words from initial letters.