In the world of Biblical studies, it's rare to encounter a word with a pure English pedigree. So many of the technical terms in this business are borrowed from Greek and Hebrew, and it can be a headache for starting students to learn to distinguish their apocalypses from their apocrypha from their apocatastaseis; a messiah from a merkabah from a mikvah.
The word "atonement," by contrast, is refreshingly easy to break down: it is simply at-one-ment, which is to say unification or reconciliation. (The difference in pronunciation between "one" and "atone" is explained by The Great Vowel Shift, for which I take no personal responsibility.)
In early texts the word can mean any kind of unification (Shakespeare uses it in Richard III to describe healing a rift between noblemen), but today it is used almost exclusively as a technical theological term. In this context, it refers to the "one-making" between God and humanity.
But why do God and humanity need to be united in the first place? Even within the Christian worldview, this question can seem puzzling at first, since Christianity posits that God is omniscient, omnipotent, and omnibenevolent, which seems to imply that God is already everywhere and that we couldn't get away from him even if we tried. Whence the need for one-making?
The Hebrew Bible
As with so many things in Christianity, the root of the answer needs to be sought among the Israelites. The God of the Jews is understood to be holy -- literally, set apart, separate. God is fundamentally different from humans -- so much so that mere contact with his presence can kill you. (That scene with the melting faces in Raiders of the Lost Ark is actually not so far off from the Biblical account, though in the Bible it only killed one guy.) In order to survive God's presence, one needs to be prepared: take off your shoes, turn your back, let another creature's blood spill so yours doesn't have to. These ideas were usually translated with the word atonement in the King James translation of the Bible, and other Biblical translations tended to follow suit. (See, for example, Exodus 29 and 30, and Leviticus 4 and 5.)
Over time, for reasons that I won't discuss in this node, the Israelites began to attach a moral value to God's differentness. Not only is he powerful, but he is also powerfully good, which means that the preparations for entering his presence also take on a moral cast. "Purifying" oneself to enter the temple is, in one sense, simply creating a sort of barrier to protect you from God's overwhelming power. In order to do that, you need to flush the humanness from you, as it were, so that you can draw closer to him without being incinerated. That is one explanation for the numerous restrictions regarding sex, food, and disease found in Leviticus, along with the requirements to slaughter animals in the Temple as sacrifices.
At the same time, however, sacrifice and purification are ways of flushing badness from you. The collapsing of the catgories of "impurity"/"uncleanness" and "badness"/"sin" is one reason why the "filth" of sex and the "filth" of disease are so frequently associated with one another in the Israelite tradition. This has led critics to claim that perfectly natural human activities are condemned in the Bible, leading ordinary people to feel guilty and ashamed of their hardwired needs. (I think that's an unfair accusation, but a contextless reading of Leviticus could easily lead a reader to that conclusion.)
At any rate, the idea of purifying oneself through sacrifice is what the Hebrew Bible seems to mean by the words usually translated "atonement." It is a way of approaching a God who is powerfully Other.
The New Testament
The Christian view, particularly as it's articulated in the Letter to the Hebrews, is that all this sacrificing of bulls and doves and whatnot is a complete waste of time, since everybody's just going to go out and sin again anyway. In a distinctly uncharitable reading of the Levitical tradition, the author of the letter says that what we really need is a single sacrifice to purify the entire human race once and for all. No animal is capable of performing this mass purification on our behalves; only a human being can do it, and in fact that human being must be God's son. (It's no coincidence that this letter is addressed to the Hebrews: it's framed as a critique of the sacrificial system in the Temple.)
This is where the familiar language of "Jesus dying for your sins" comes from. Even people who don't know much about Christianity tend to be aware, in some vague way, that the son of God was supposedly tortured to death in order to "pay" for the crimes of humanity. In the Christian tradition, this exchange is how the word "atonement" is generally understood. Paul makes this explicit in his Letter to the Romans, which the KJV renders as "we also joy in God through our Lord Jesus Christ, by whom we have now received the atonement." (The Greek word being translated here is καταλλαγην, "reconciliation.")
Unfortunately, the abstraction of the idea of atonement has led to a lot of thorny theological problems for Christian writers. It's easy to understand the Jewish sense of drawing close to a terrible, dangerous God with the aid of purificatory practices. (You may not agree with this idea of God, but it is at least consistent with Israelite views of holiness.) But it is harder to understand how killing God's son can "pay for" the sins of anyone else. If I commit a murder, what good does it do anyone to send my friend to the electric chair? My victim is still dead and I'm still free and now the state's gone and executed an innocent person. It doesn't make any obvious kind of sense.
Over the years, Christian philosophers have worked out various ways of understanding how the death of Christ could serve the same function as animal sacrifice "for everyone" "once and for all" -- or, more to the point, what it means for someone to "die for" someone else's crimes. Different sects of Christianity have adopted different perspectives on this issue, all of which I intend to node separately at some point.
After The New Testament
The names given to the most widespread Christian theories of atonement are as follows, in roughly chronological order of their development:
- The "Ransom" Theory: Picking up on the idea of a "ransom for many" in Mark 10:45, this theory, associated with Origen of Alexandria, says that God used Christ to "buy off" Satan (who had the job of punishing humans for their sins). This is generally perceived as the most primitive theory of atonement, not only because it is chronologically early, but also because it seems to be contingent on some kind of sneaky and deceitful relationship between God and the devil.
- The "Satisfaction" Theory: A distinctly medieval theory that understands sin in terms of dishonour to God. Just as a feudal lord cannot remain fair while letting criminals get away with bad behaviour on his property, so also a just God must exact satisfaction for crimes against him. Anselm of Canterbury argued that God's infinite justice demands an infinite restitution, which can only be paid by his son (since ordinary humans "owe" more than they can pay). Later, this view would be refined into what is usually called the Penal Substitution Theory, which tries to work out just punishments and payments for humanity's crimes; not surprisingly, this dour perspective is most strongly associated with John Calvin.
- The "Moral" Theory: In an attempt to remove the mechanics of atonement from the supernatural realm, several Christian authors, most famously Peter Abelard, argued that Christ's willingness to die for God's sake should serve as an example for, and an inspiration to, humanity. In this view, the sacrifice did not change the fabric of the universe so much as give humans a model to follow.