can someone please explain me what exactly are ateji and how they differ from on'yomi? I have been told already, but I can't get my head around it.
In simplest form, on'yomi and kun'yomi are ways of reading kanji that relate to the meaning of the character. So, for example, if 独 is referring to something being alone, then you're using either an on'yomi (e.g. doku) or a kun'yomi (e.g. hitori).
If you take a kanji's reading and use it to write another word, then that's ateji. For example, if you use 独 as the "do" in "doitsu", meaning Germany, then that's an ateji.