language specifies the language used for displaying Oracle messages, sorting, day names, and month names.
NLS_LANGUAGE is a Nls Parameter that define the language and implicitly the parameters:
if they are are not set.
When you create a database, you have to decide what language your data will be stored in. When you create a database, you can specify the territory and code set. The territory and code set may be different from the current operating system settings. If you do not explicitly choose a territory and code set at database creation time, the database will be created using the current locale. When you are choosing a code set, make sure it can encode all the characters in the language you will be using.
Another option is to store data in a Unicode database, which means that you do not have to choose a specific language; Unicode encoding includes characters from almost all of the living languages in the world.