Every database has a database character set and a database collation. : COLLATION Character Set « Table « MySQL Tutorial

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2. Table
3. COLLATION Character Set

The CREATE DATABASE and ALTER DATABASE statements have optional clauses for specifying the database character set and collation:

All database options are stored in a text file named db.opt that can be found in the database directory.

CREATE DATABASE db_name
    [[DEFAULT] CHARACTER SET charset_name]
    [[DEFAULT] COLLATE collation_name]

ALTER DATABASE db_name
    [[DEFAULT] CHARACTER SET charset_name]
    [[DEFAULT] COLLATE collation_name]

CREATE DATABASE db_name CHARACTER SET X COLLATE Y;

If both CHARACTER SET X and COLLATE Y were specified, then character set X and collation Y.

If CHARACTER SET X was specified without COLLATE, then character set X and its default collation.

If COLLATE Y was specified without CHARACTER SET, then the character set associated with Y and collation Y.

Otherwise, the server character set and server collation.

Quote from MySQL document http://www.mysql.com

CREATE DATABASE db_name CHARACTER SET latin1 COLLATE latin1_swedish_ci;