Here's a word from co-creator of Avatar and Legend of Korra, Bryan J. Konietzko. Here's what Mr. Konietzko published on his official Tumblr on July 12, 2012.

Bryan J. Koneitzko -
"The Legend of Korra has been picked up for an additional 26 episodes, which will be split into Books 3 & 4! Mike and I had been hoping to announce this big news to the crowd at the Korra SDCC panel tomorrow morning, but the network put out a press release yesterday. And as we suspected, people are pretty confused, understandably so. Hopefully people are also excited.
I’m sure I’ll be trying to clear this up in posts for a long time to come, but I’ll lay it all out right now:
–Book 1 = 12 episodes
–Book 2 = 14 episodes
–Book 3 = 13 episodes
–Book 4 = 13 episodes
–TOTAL = 52 episodes
Why are the four books split up into those numbers of episodes, you might ask?
Initially, Nickelodeon picked up Korra as a 12-episode miniseries. Their idea was to do 12-episode arcs that were more standalone than the original Avatar series. Mike and I were cool with this idea, as we had originally wanted the seasons to be 12 episodes long instead of 20, and creatively we liked the idea of doing tighter story arcs.
The original plan was that if Nickelodeon wanted more episodes, they would order them 12 episodes at a time. But while we were in production on Book 1, Nickelodeon decided to change their season lengths from 20 episodes (like Avatar had) to the more standardized international length of 26 episodes. They liked how Book 1 was coming out and decided to round out the order to fit their new 26-episode mold, and we got a 14-episode pick-up, which became Book 2.
Then, the network wanted even more Korra, so they picked up another order of 26 episodes. Mike and I wanted to stick with the shorter “books,” so creatively we are splitting the second order of 26 into Books 3 & 4, 13 episodes each.
What makes this even more confusing is that the network considers each block of 26 episodes a “season,” which is another reason we try to stick to calling these Korra arcs “books.” So for the network’s purposes, Books 1 & 2 are Season 1, and Books 3 & 4 are Season 2.
When will Books 2, 3, and 4 come out?
What will happen after Book 4?
Mike and I plan to wrap up the Korra storyline at that point with the close of Book 4. Then I plan to crawl into a dark cave and go into hibernation. And hopefully see my wife more often.
I hope that clears it up. SEE YOU IN SAN DIEGO! If you can’t make the panel and Nick booth signing tomorrow, we’ll be signing at the Dark Horse booth on Saturday, I *think* at 2:30 (but I’m not sure). If you are going to SDCC, please be safe! You probably already heard, but tragically a convention attendee died in an accident on Tuesday morning. Take care."
                    ~ Bryan J. Konietzko Tumblr