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> Is there an english word for the practice of commonly refering to an entity by a subset of that entity?

A metonymy.

[edit: swolchok is right, it's a synecdoche]

Not quite. Metonymy is calling something by the name of a related object. The most common use of metonymy is probably "the White House" for President Obama's (Bush's, Clinton's, etc.) administration. See http://en.wikipedia.org/wiki/Metonymy

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