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This is definitely a style question, where there's no one right answer. The only way I can see to answer it, aside from giving my own opinion, is to refer to the only experts possible in this type ...
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#3: Attribution notice added
Source: https://writers.stackexchange.com/a/25831 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#2: Initial revision
This is definitely a style question, where there's no one right answer. The only way I can see to answer it, aside from giving my own opinion, is to refer to the only experts possible in this type of work: authors themselves. Let's grab my current favorite book and find out what it does. [**The Fifth Season by N. K. Jemisin**](http://rads.stackoverflow.com/amzn/click/0316229296) > It moves a lot, this land. Like an old man lying restlessly abed it heaves and sighs, puckers and farts, yawns and swallows. Naturally this land's people have named it _the Stillness._ Note italics > The end begins in a city: the oldest, largest, and most magnificent living city in the world. The city is called Yumenes, and once it was the heart of an empire. Note plaintext. But these are proper nouns. She uses a lot of complex words, but most of them seem to exist already, just not in common usage. Let's look at the next created word she uses: > There's a group of young women walking along one of the asphalt paths below; the hill is in a park much beloved by the city's residents. (_Keep green land within the walls,_ advises stonelore, but in most communities the land is fallow-planted with legumes and other soil-enriching crops. Only in Yumenes is greenland sculpted into prettiness.) Your attention might be drawn by "green land", but it's an obvious and simple combination of "green land", from the previous sentence, and hardly needs explaining. No, the unique word here is "stonelore". Slipped right in there where you'd hardly notice. She's italicized the advice, but not the word itself. Let's look at the rest of this paragraph to finish our study of this book. > The women laugh at something one of them has said, and the sound wafts up to the man on a passing breeze. He closes his eyes and savors the faint tremolo of their voices, the fainter reverberation of their footsteps like the wingbeats of butterflies against their sessapinae. He can't sess all seven million residents of the city, mind you; he's good, but he's not that good. Here we have two coined words: "sessapinae", and "sess". Like "stonelore", both are blended into the text naturally, so you'd hardly notice them. Also, you can immediately guess that they're related to each other, although one is used as a noun and the other as a verb. While she does a bit of clarifying for "stonelore" later in this passage, you don't fully understand what is meant by "sess" until a third of the way into the book, and what the "sessapinae" is exactly takes still longer. But she uses the terms fluidly and naturally, such that you are able to follow even if you don' fully understand. So, for this selection, we have only one unique word italicied: _the Stillness_. This serves the purpose of isolating the word itself from its meanings, focusing your attention on the irony of naming a seismically active land Stillness. The other words are treated naturally, as part of the text, and you're expected to derive the meaning as you go. **Therefore** I had intended to skim some other books, but I got tired and anyway the evidence bears up my initial impression. ([Ancillary Justice](http://rads.stackoverflow.com/amzn/click/031624662X) and [The Summer Prince](http://rads.stackoverflow.com/amzn/click/0545417805) both have a plethora of neologisms, if you want to do further research.) You _should_ use italics if you want the word to stand apart from the text. If you want to draw attention to it as a word, if you want to highlight that it's strange in some way, or if you don't want your audience internalizing it. You _shouldn't_ use italics if you want the word to flow naturally. If you want it to blend in with the text, if you want the audience to figure out what it means on their own, or if you want to make it part of your reader's natural lingo. So the real answer is, **what do you want?**