Word made from initials (7)
I believe the answer is:
acronym
'word made from initials' is the definition.
(I've seen this before)
This is the entire clue.
(Other definitions for acronym that I've seen before include "eg RADA" , "Word such as radar, laser" , "Radar or Nato, maybe" , "Word formed from initials" , "Word made up of initials" .)