Depends on the badge.
Stuff like awards etc yeah they'd be a badge, medal certificate whatever.
Stuff like location badges such as Cesspool wouldn't say they would be a physical item.
Brawling Cactus from a distant planet.
As said, depends on the badge.
Some might be purely OOC, some IC.
Some might be medals in cases, some might be 'street credit' titles or what ever.
Basically, commen sense and your choice.
@ShadowGhost & @Ghostie
The Grav Mistress, Mistress of Gravity
If you have nothing useful to say, you have two choices: Say something useless or stay quiet.
I agree, depends on the badge. Soem like Celebrity or Beautiful are just descriptions of the character. Others like Medic denote a qualification or experience. Still others would actually be awards granted for deeds done.
Whatever the hell you want, really!
@FloatingFatMan
Do not go gentle into that good night.
Rage, rage against the dying of the light.
What everybody else has said already.
For example I used "Hero of the City" as a real award given to Britanic by City Hall in the short story "Ding!!!".
On Big Game badges are merely used as descriptors. ie "Faithful" when he was being good, "Slacker" because he is, and "Driller"...um best not ask! 
How does "Driller" fit? 
@ShadowGhost & @Ghostie
The Grav Mistress, Mistress of Gravity
If you have nothing useful to say, you have two choices: Say something useless or stay quiet.
i like to use the badges as an extra bit of discription, but thats about it.
'bout half a year ago now when I started, I pretty much poked some few people I'd started to talk to about Union and the answer seemed more or less the same as here, and for most part I think I pretty much agree with the general consensus.
The first incarnation of Kay's description distinctly contained the phrase "She bears her 'Protector of Innocents' badge with pride." - not really to acknowledge the "level 10 woo" part but rather because I felt the title fit her. Two characters and plenty of levels later, she still uses it - though perhaps less as a 'badge' and more as a term for what function she serves.
I think in many cases, as stated, it's not entirely a physical thing but rather something you embody - especially considering a few honorary villain badges I've seen.
[ QUOTE ]
How does "Driller" fit?
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Blessed are the truly innocent amongst us! 
HAH! If Ghostie's innocent, I'm Shirley Temple!
@FloatingFatMan
Do not go gentle into that good night.
Rage, rage against the dying of the light.
Shirley not!
I didn't know you were a drink! 
@ShadowGhost & @Ghostie
The Grav Mistress, Mistress of Gravity
If you have nothing useful to say, you have two choices: Say something useless or stay quiet.
always has been a bit... Flamboyant...
Well.. That kinda backfired!
Oh well... Off to ballet class daaahlinks! See you later!
@FloatingFatMan
Do not go gentle into that good night.
Rage, rage against the dying of the light.
The reason I asked was merely for the fact that I was wondering whether the GM badges would be considered 'awards for services in protecting the city' since I'd like to have my character actually displaying them in his living space.
Badge Earned: Wing Clipper
A real showstopper!
If that's what you'd like them to be, then that's what they are! Just remember, GM's are persistant threats, so you can't defeat them, merely beat them back.
@FloatingFatMan
Do not go gentle into that good night.
Rage, rage against the dying of the light.
aye I know...but considering I'd like him to have a collection of all the GM badges (now successfully taken out all the GMs...damn I wish there was a accolade..still is fun ) put up on his wall with pictures of them all with big red marker cross across all of them.
Badge Earned: Wing Clipper
A real showstopper!
I don't consider them to be physical items (although there's no real reason that they couldn't be) so if you want to show them off as trophies, why not? I use mine as either hints about their current plots or as another way of advertising their status. Out financial system is supposedly based on our reputation so I see earnt badges as an extension of that. If you earn X badge for beating X number of X, then the public know you as a persistent foe to X. So it adds a little bit of description for me. Dante normally has one of the 'Mystic' badges on him as it tends to be how he is perceived by others.
@Dante EU - Union Roleplayer and Altisis Victim
The Militia: Union RP Supergroup - www.themilitia.org.uk
Often use the badge titles to describe my characters current situation, or describe herself. Ive never treat a badge as IC though, definatly no harm in doing so.
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(now successfully taken out all the GMs...damn I wish there was a accolade..still is fun )
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What about the Seeker of Monsters, Hollows ( 21, -345, -1280) explore badge? I know it's an explore, but the wording fits perfectly.
Currently using the Jack in Irons badge.
Giant Killer.
Fits the description quite nicely but didn't think of the Seeker of Monsters, cheers Ly, wow bein helpful twice in one night, damn you and your niceness! (just kidding )
Badge Earned: Wing Clipper
A real showstopper!
I am nice because I am damned :P Happy to help.
Just a quick check of general consensus.
Would you describe the badges we earn as physical items (i.e. they come in their own little presentation box and presented like medals) or are they just a game function thing for you?
Badge Earned: Wing Clipper
A real showstopper!