It's possible that the acronym began as a mnemonic (it's not an easy word to remember how to spell) but somewhere along the line that was forgotten and it got taken as the word's origin. That's unlikely anyway, since using acronyms as words is a relatively modern phenomenon.
Folk etymology is everywhere, though, and people will insist on telling you completely invented origins for words which they believe implicitly. Another often claimed to be an acronym is news, for North East West South (presumably because the more common order would result in the word nsew). In fact, it's more prosaic than that. The word quite literally means "new things", as when we ask someone "What's new?"
It's very easy, too, to make assumptions about words that seem similar, especially when the meanings are compatible too, but that doesn't always prove a connection. The number of possible sound-combinations isn't infinite, and some will appear in languages all over the world. The problem is, they've often come to that point by very different routes.
A while ago, someone on an online forum claimed that the word devil is (not might be, but is) related to the Sanskrit word devi, meaning a lesser god. On the face of it, that's entirely possible: it wouldn't be the only time the gods of one religion have been turned into the devils of another.
Except that it isn't true. A brief look at the history of devil shows that it comes from the Old English deofol, and that derives from the Latin diabolus and the Greek diabolos, from which we get diabolic (trust me: b and f really are closely related sounds). The original word means an accuser or slanderer, and clearly has no connection with the Sanskrit word.
This kind of thing even happens within the same language. It can produce good puns: for instance, if we think of rock music as something to do with stones (as Dylan said, everybody — especially rock musicians — must get stoned). However, where rock as in stone comes from French roche and Latin rocca, rock meaning sway (which is how the music got its name) is a Germanic word, roccian in Old English. No connection whatsoever.
On the other hand, the opposite can sometimes happen, and the most bizarre links can exist between apparently unconnected versions of the same letter-jumble. One of my favourites is check. This has numerous different meanings: to make sure something's OK, to stop something's progress, a pattern of squares or (spelt cheque here in Britain) a bank's promissory note, as well as several others.
Which makes it more surprising that they all derive from exactly the same source: the Persian word for king, usually rendered as shah. It entered the English language via its use in chess — when you call out check, you're essentially saying "look to your king", while checkmate means "the king is dead". All the other meanings are ultimately references to or metaphors for some aspect of chess or of putting the king in check.
This happened because words change their meanings through the centuries, sometimes causing confusion. We all know, and usually accept without thought, the saying "the exception that proves the rule", without considering that it's absurd. After all, an exception to a rule challenges the rule, rather than confirms it.
But that's precisely what the saying really means. The word prove used to mean test (it's still found in that sense in military proving grounds) and the expression means that an exception tests whether a rule is still valid — not a confirmation, but still a valuable scientific process.
For example, we have a rule that says "An object will fall to the ground when it's suspended in mid-air." "Ah," someone objects, "but when I threw a stone, it went up, not down." You then explain at length the precise difference between suspending and throwing, possibly demonstrating both with the objector. The rule is neither tested nor affected.
"Ah," says someone else, "but I suspended (not threw) a balloon in the air, and that floated up."
This is a much more valid objection, and we actually have to rephrase the rule to say "An object that's heavier than air will fall to the ground when it's suspended in mid-air." The original rule has been proved in the old sense, but definitely not proved in the new sense.
Ultimately, of course, it's not a big deal if someone misunderstands the origin of a word. The problem is the internet. The flip-side of having all the information we might need at our fingertips is that it's not all true, and once something's been stated as fact online, it can be incredibly difficult to convince people that they shouldn't believe it.
There's a very simple answer to this: get a good dictionary, whether it's on your bookshelf or on your computer. And I mean a GOOD dictionary, not joebloggsonlinedikshonary.com. Something like the Oxford or Collins Dictionaries (or I imagine Merriam Webster if you're in America) will give the source of each word, as far as it's known, at the end of the entry. Five minutes with the Concise Oxford Dictionary would have told you everything I've put in this article, and a great deal more.
You too can be an etymologist, instead of a folk etymologist.