The acronym AIML stands for Artificial Intelligence Markup Language. AIML is an XML-based language used to create natural language software applications. It allows developers to define rules for mapping user inputs to desired outputs, making it particularly useful for building chatbots and virtual assistants. By using AIML, programmers can enhance conversational abilities in systems, enabling more interactive and dynamic user experiences. It is primarily associated with the ALICE chatbot and similar AI projects, promoting easier semantic understanding.