The letters represent the different parts that are included in what was referred to as “the gay community” beforehand. As the older term became less and less accurate, the acronym became more prominent as a form of addressing “the community”. Starting in the middle of the 1980’s, the letters LGB were used, including Lesbian, Gay and Bisexuals and as time progressed have evolved to include more representations of queer identity, and signify the diversity such identities has allowed.
The letter T for Transgendered and Transsexuals was added in the early 1990’s, and the letter Q for Queer was added towards the end of the 1990’s. Those two letters allowed people who’s sexual orientation was not necessarily strictly LGB to be included, on the basis of their gender variation. This inclusion made it clear that any identities which are not hetero-sexual or cisgendered (i.e people who’s perceived gender correlates to the sex they were assigned at birth) are included under this umbrella term.
The letters I for intersexed, and A for A-sexuals are also widely accepted nowadays as a part of this acronym. There are other variants of the acronym when including other non heterosexual and non cisgendered people, to the point where it is sometimes written LGBT+ to include all related communities.
Of course, this acronym is not free from controversy. Some claim that Transgendered and Transexuals should not be under the same umbrella term as LGB, as theirs is a gender based difference and not a sexual based one. Some claim that the struggles facing Trans people are not in accordance with LGB ones, and “bunching” them together is harmful to the Trans cause. Similarly, there is a debate regarding the inclusion of A-sexual people under that umbrella, as the opposing party claims that the difference between heterosexuals and LGB people is based on the difference in the object of sexual attraction, and not the complete lack thereof.
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The rainbow flag represents all the different colors of the spectrum, and the endless possibilities of queer identity: