Narrative atoms are small units of narrative or story that can, within the context of the overall narrative, stand alone. That does not mean they need to be completely self-explanatory, just sit comfortably on their own.
In a standard linear story, each atom would be placed sequentially, so their ability to stand alone is less important. However, in many games narrative bends and twists and turns in a non-linear way. For that to work, for a story to makes sense as it jumps from A to C to G to B and back again, each section, each narrative atom must be able to hold its own without the need every other atom to support it.