Even candy bar manufacturers agree!
An abbreviation is the replacement of part of a word by a period, as in "ib." for "ibidem" or "Dr." for "Doctor". One does pronounce the whole word here, for instance one says "Doctor" and not "Drrr", hence the need for a period to indicate something is left out in spelling as compared to what one actually says.
Very popular abbreviations are often pronounced as spelt instead of in their original form, and in that case the period is eventually dropped, unneeded, in spelling. The abbreviation becomes a word in its own right. An example is "lab" for "laboratory". One says "lab" and not "laboratory", so no period is needed any more.
Even candy bar manufacturers agree!
In complex abbreviations, multiple words are treated in this manner, as in "B.B.C." for "bee bee see" ("British Broadcasting Corporation"). If one actually pronounces it as "bee bee see", then, as just explained, the periods could theoretically be dropped in spelling and the letters treated as words in their own right, resulting in "B B C" (note the spaces). This is however unusual, probably because new formation of one-letter words is avoided for good reasons (it would be impossible to know what such a one-letter word meant outside its context). So one writes complex abbreviations with periods even though they are pronounced as letters and not as full words ("B.B.C.").
Recently there has occurred a tendency to shove the letters of such a complex abbreviation together without periods or spaces, as in "BBC", "IBM", or "IQ". This is regrettable though as it implies that the letters together form one word, in these cases the words "bubbuk", "ibbum", and "ik". But that is not at all what one says; one says "bee bee see", "eye bee em", and "eye queue". To make explicit that one pronounces the individual letters and not the word they together would form, either periods or spaces are needed between the letters, and periods are the better choice (for the aforementioned reason that one-letter words are not desirable).
The combination of a period and space can logically be used to imply a pronunciation in full words rather than as letters: "B. B. C." sounds as "British Broadcasting Corporation", while "B.B.C." is logically pronounced as "bee bee see".
An acronym is a complex abbreviation that is actually pronounced as the word that is formed by its letters, and not as its individual letters, and can therefore be written without periods; a good example is "RADAR". This is pronounced as "radar", and not as "are a dee a are". If the latter were the case, the spelling would have to be "R.A.D.A.R."
Problematic with the currently popular habit of writing complex abbreviations as if they were acronyms - that is, of writing for instance "IQ" instead of "I.Q." - is that the reader can not possibly know if a word ("ik") or an abbreviation ("eye queue") is intended. Especially with less common words and with less common abbreviations this is a serious problem. The reader then simply does not know what to read. And, from the viewpoint of the writer who suffers from this habit, it becomes impossible to make explicit to the reader whether a word or an abbreviation is meant. Such a writer disclaims part of one's linguistic palette. One is in the position of the boy who always cried "Wolf!" when there was no wolf, and was therefore not believed the one time there really was a wolf. The writer who always leaves out the periods from abbreviations will one day not be understood when that writer really means to write a word and not an abbreviation.
Another matter is that of letter case. Some complex abbreviations are always written in capitals, some in lower case, and some in a mixture, or in different cases by different authors on different occasions. Some acronyms are written in capitals and some in lower case, and some in different cases by different authors on different occasions. So, letter case does not suffice to identify what is written as either an abbreviation or an acronym or a regular word; specifically, that something is written in all capitals does not imply it is an abbreviation to be pronounced as letters. What remains needed is the period.
A tabulated overview of the possible spellings and their pronunciations:
| Spelt | Spoken |
|---|---|
| IQ | ik |
| I.Q. | eye queue |
| I. Q. | Intelligence Quantifier |