+ENCODING optionally specifies the character set used by the included
+file. Its argument, which is not case-sensitive, must be in one of
+the following forms:
+
+@table @asis
+@item @code{Locale}
+The encoding used by the system locale, or as overridden by the SET
+LOCALE command (@pxref{SET}). On Unix systems, environment variables,
+e.g.@: @env{LANG} or @env{LC_ALL}, determine the system locale.
+
+@item IANA character set name
+One of the character set names listed by IANA at
+@uref{http://www.iana.org/assignments/character-sets}. Some examples
+are @code{ASCII} (United States), @code{ISO-8859-1} (western Europe),
+@code{EUC-JP} (Japan), and @code{windows-1252} (Windows). Not all
+systems support all character sets.
+
+@item @code{Auto}
+@item @code{Auto,@var{encoding}}
+Automatically detects whether a syntax file is encoded in
+@var{encoding} or in a Unicode encoding such as UTF-8, UTF-16, or
+UTF-32. The @var{encoding} may be an IANA character set name or
+@code{Locale} (the default). Only ASCII compatible encodings can
+automatically be distinguished from UTF-8 (the most common locale
+encodings are all ASCII-compatible).
+@end table
+
+When ENCODING is not specified, the default is taken from the
+@option{--syntax-encoding} command option, if it was specified, and
+otherwise it is @code{Auto}.
+