Character Sets and Collations in General

A character set is a set of symbols and encodings. A collation is a set of rules for comparing characters in a character set.

Suppose that we have an alphabet with four letters: 'A', 'B', 'a', 'b'. We give each letter a number: 'A' = 0, 'B' = 1, 'a' = 2, 'b' = 3. The letter 'A' is a symbol, the number 0 is the encoding for 'A', and the combination of all four letters and their encodings is a character set.

What if we want to say that the lowercase and uppercase letters are equivalent? Then we would have at least two rules: (1) treat the lowercase letters 'a' and 'b' as equivalent to 'A' and 'B'; (2) then compare the encodings.
We call this a case-insensitive collation. It's a little more complex than a binary collation.
Read more: CharacterSets/Collations