Is it Nato or NATO?

A question from Wyoming Bill: 

Argh. It is "NATO". Not "Nato". I don't like this British trend. What does +Nora Ransom think?

From Wikipedia:
"While acronyms have historically been written in all-caps, British usage is moving towards capitalizing only the first letter in cases when these are pronounced as words (e.g., Unesco and Nato), reserving all-caps for initialisms (e.g., UK and USA)."

My answer:

That's not something I've seen before. An acronym is an abbreviation, as you probably know, and not all abbreviations are capitalized. I'd be tempted to point out that an acronym of a proper name, just as an abbreviation of a proper name, should be in all caps, so UK, but NATO as well, although mm and wysiwyg. Radar, scuba, and sonar would be special cases because they have actually become words, which is not likely to be the case for NATO. Does that make sense?

And a few comments:

An acronym is an abbreviation that can be pronounced as a word. So UK is an abbreviation while NATO is an acronym.

Abbreviations and acronyms, unless they are universally recognized, should be defined.

A large number of acronyms have entered the English language as words.

            Sonar: Sound navigation and ranging

            Scuba: Self-contained underwater breathing apparatus

            Radar: Radio detection and ranging

            Laser: Lightwave amplification by stimulated emission of

                       radiation

Wisiwyg never made it although I still occasionally hear it from computer programmers (what you see is what you get).

Nearly everything about writing should made a certain amount of logical sense. Of course, whose logic and whose sense is another discussion for another day.