ATC stands for Artist Trading Card. It’s a small work intended to be given away or traded. The standard measurement is 89 x 64 mm (3½ x 2½ inches). ATCs can be original works or prints.
A related item is an ACEO, which stands for Art Card Editions and Originals. These are the same size but (usually) original works only, not prints, and are intended to be sold rather than traded. There’s plenty of overlap, of course. People trade ACEOs and sell ATCs.
So, why make such small work?
From an artist’s point of view, they’re inexpensive and relatively fast to create compared to a larger work. They’re a good place to experiment with new ideas or techniques without the pressure of feeling like you’re wasting expensive materials. And most of all, they’re fun!
From a viewers point of view, they’re free or cheap (unless the artist is very well known), easy to collect and store, and easy to trade with other people (no more expensive than sending a letter). And you never know – one day, the artist who created that ATC/ACEO might be extremely collectible!