Postgres - Encoding, Collation and CType
I know that encoding affects how the information is actually
    stored (IE whether 'A' requires one byte or multiple bytes,
    and what value those bytes have, depend on the encoding).


Yes. Encoding is the character-to-byte conversion algorithm.
For mono-byte encoding such as LATIN1, it's trivially
byte value = character number, but for UTF-8 it's more
complicated.


  I've been told that collate specifies rules for comparing
   characters. If you were to sort a bunch of strings, the collate
   type would dictate the order.


Yes, collate specifies how strings are compared. The collation
service is provided by the operating system or optionally
by the ICU library for PostgreSQL 10 or newer.
Sorting arbitrary strings with linguistic rules is a
complicated business.
The Unicode standard and ISO provide rules but they're heavily
customizable and not all C libraries implement them fully anyway.
See for instance https://en.wikipedia.org/wiki/Unicode_collation_algorithm
for more.


  I've struggled to find what Ctype is; possibly related to concepts
  like uppercase and lowercase (given 'a' knowing that 'A' is the
  uppercase form?).


LC_CTYPE in POSIX is related to the functions in ctype.h
Postgres is strongly influenced by POSIX in that matter and uses a
per-database lc_ctype more or less like POSIX uses LC_CTYPE.

Aside from upper() and lower(), it's also relevant for
regular expressions and full text search (case-folding of tokens).

I think that Postgres could do without an independant lc_ctype
(using the same value as lc_collate) except for one thing:
it's interesting to have lc_ctype to something.UTF-8 for instance, to
have the full range of characters properly supported, and
lc_collate to C because C as a collation is much faster than any linguistic sort implied by lc_collate=lang_country.UTF-8.

Robert Haas (postgres committer) wrote an interesting post about essentially that subject when the COLLATE support was enhanced in Postgres: "The Perils of Collation-Aware Comparisons"


  I don't understand how (as in my example) I can have a UTF8 encoded
   database and use a collate value of English 1252. UTF8 has many
   characters that win1252 does not


This is a Windows-specific thing, due to Windows not following the
POSIX model with locales and collations. On Windows and with non-ICU
collations, Postgres will convert the strings from the db encoding to
UTF-16 (wchar_t) and call wcscoll_l(). This is why the encoding is decorrelated
from the collations.

With ICU collations, either Postgres passes directly UTF-8
contents if it can, or it converts the strings to UTF-16,
so again collations are not tied to a particular database encoding,
contrary to the POSIX model and its family of strcoll functions.