There are default settings for character sets and collations at four levels: server, database, table, and column. The following description may appear complex, but it has been found in practice that multiple-level defaulting leads to natural and obvious results.
CHARACTER SET is used in clauses that specify a
character set. CHARSET may be used as a synonym
for CHARACTER SET.

User Comments
Note that if you specify the same default character set on a lower level but without a default collation, the default collation will be the one of the character set, not the one of the higher level. So this overrides your previous default collation.
Suppose you have specified a default character set for your database, e.g. 'latin1', with a (deviating) default collation ('latin1_bin'). Now you create a table with default character set 'latin1', but no default collation. The default collation of the table will now be the one of the character set ('latin1_swedish_ci'), and not the one you used on the higher level as default collation for the same character set ('latin1_bin'). (Established in MySQL 4.1)
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