What is the difference between a grandmaster and international master?
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By whom? Take a look at the current chess news. Anand, Kramnik, Topalov, etc. are all referred to as GM's.
I, too have never heard the term IGM.
IGM used to be the term back in the 1970s and 80s. It got shortened to GM, probably as a result of increased computer use for data lists etc.