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Capitals are used when writing acronyms. At the most basic level an acronym is a shortened form of a group of words made up of the first letter of the (important) words of a multi-worded noun. Each letter is capitalized. For example, USA is short for United States of America.

Note: in academic writing you can use acronyms by writing the multi-worded noun (usually an organization) in-full first, followed by the acronym in parentheses. After that, you can use the acronym alone later in your text.

The World Health Organization (WHO) is a member of the United Nations Development Group (UNDG). Helen Clark is head of the United Nations Development Program (UNDP) which operates as part of the UNDG.

Some acronyms are made up of the first letters of just some important words, or of a few of the words of the thing they are representing. If an acronym has become so well-known in the language, it can take on the status of an ordinary word. It no longer needs capitals.

For example, scuba, short for self-contained underwater breathing apparatus has become a word in its own right, despite being an acronym.

Note: If this type of acronym is short for an organization, it will probably start with a capital letter.

The availability of radar significantly increased revenue from traffic offences.

Heindrich was an infamous Gestapo officer.