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From: Webster's Revised Unabridged Dictionary (1913)

 U·ni·ver·si·ty n.; pl. Universities
 1. The universe; the whole. [Obs.]
 2. An association, society, guild, or corporation, esp. one capable of having and acquiring property. [Obs.]
    The universities, or corporate bodies, at Rome were very numerous. There were corporations of bakers, farmers of the revenue, scribes, and others.   --Eng. Cyc.
 3. An institution organized and incorporated for the purpose of imparting instruction, examining students, and otherwise promoting education in the higher branches of literature, science, art, etc., empowered to confer degrees in the several arts and faculties, as in theology, law, medicine, music, etc. A university may exist without having any college connected with it, or it may consist of but one college, or it may comprise an assemblage of colleges established in any place, with professors for instructing students in the sciences and other branches of learning.  In modern usage, a university is expected to have both an undergraduate division, granting bachelor's degrees, and a graduate division, granting master's or doctoral degrees, but there are some exceptions.  In addition, a modern university typically also supports research by its faculty
    The present universities of Europe were, originally, the greater part of them, ecclesiastical corporations, instituted for the education of churchmen . . . What was taught in the greater part of those universities was suitable to the end of their institutions, either theology or something that was merely preparatory to theology.   --A. Smith.
 Note:From the Roman words universitas, collegium, corpus, are derived the terms university, college, and corporation, of modern languages; and though these words have obtained modified significations in modern times, so as to be indifferently applicable to the same things, they all agree in retaining the fundamental signification of the terms, whatever may have been added to them. There is now no university, college, or corporation, which is not a juristical person in the sense above explained [see def. 2, above]; wherever these words are applied to any association of persons not stamped with this mark, it is an abuse of terms.