[vim] How can I change a file's encoding with vim?

I'm used to using vim to modify a file's line endings:

$ file file
file: ASCII text, with CRLF line terminators
$ vim file
:set ff=mac
:wq
$ file file
file: ASCII text, with CR line terminators

Is it possible to use a similar process to change a file's unicode encoding? I'm trying the following, which doesn't work:

$ file file.xml
file.xml: Unicode text, UTF-16, little-endian
$ vim file
:set encoding=utf-8
:wq
$ file file.xml
file.xml: Unicode text, UTF-16, little-endian

I saw someone say that he could "set fileencoding=utf-8, then update and write the file, and it works," but I seem to be missing something, or else he was confused. I don't know what he meant by "then update."

It could be useful to change the encoding just on the command line before the file is read:

rem On MicroSoft Windows
vim --cmd "set encoding=utf-8" file.ext
# In *nix shell
vim --cmd 'set encoding=utf-8' file.ext

See starting, --cmd.

Just like your steps, setting fileencoding should work. However, I'd like to add one "set bomb" to help editor consider the file as UTF8.

$ vim file
:set bomb
:set fileencoding=utf-8
:wq

While using vim to do it is perfectly possible, why don't you simply use iconv? I mean - loading text editor just to do encoding conversion seems like using too big hammer for too small nail.

Just:

iconv -f utf-16 -t utf-8 file.xml > file.utf8.xml

And you're done.

Notice that there is a difference between

set encoding

and

set fileencoding

In the first case, you'll change the output encoding that is shown in the terminal. In the second case, you'll change the output encoding of the file that is written.