A texture atlas is a large image containing a collection, or "atlas", of sub-images, each of which is a texture map for some part of a model.
What is a texture atlas?
A texture atlas is a large image containing a collection, or "atlas", of sub-images, each of which is a texture map for some part of a model. The sub-textures can be rendered by modifying the texture coordinates of the model's UV-map on the atlas, essentially telling it which part of the image its texture is in. When many small textures are used frequently, it is often more efficient to store the textures in a texture atlas which is treated as a single unit by the graphics hardware.
Differences between a texture atlas & a spritesheet.
A spritesheet typically holds the animation frames of a specific 2d entity (character, enemy, projectile, etc) in a game.
A texture-atlas holds most any manner of data for rendering 3d objects into 2d. Such data may include colors & patterns (a raster image texture), geometry details (normal map) or other information such as opacity.
While there is some overlap between the two, in practice the expertise required for each is often divergent.