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A charter is a legally binding document incorporating an organization or institution and specifying its purpose, remit or bylaws. Organizations such as the Institution of Civil Engineers in the UK is chartered to maintain and advance the science and practice of civil engineering in the UK, and by this charter has the right to regulate the business of civil engineering in the UK; this gives rise to a status of a chartered engineer - one who satisfies the requirements of the charter holding organization. Royal Charters also exist and may have legal status in the case of Universities & similar bodies the power to award degrees normally comes from a Royal Charter.
Reference: Wikipedia