This is the most common Quenya word for “Man” as a species, most frequently appearing in its plural form Atani (LotR/1034). In notes on Words, Phrases and Passages from the Lord of the Rings from the late 1950s or early 1960s, Tolkien wrote:

The name Atan, pl. atani was already given in Quenya in Valinor to the “Second Kindred” whom the Eldar learned were to appear (or had appeared) in Endor. It meant “the Second”. The Sindar had no name for Men, until they arrived in Beleriand and were first found by Finrod. They borrowed the Q atan and gave it Sindarin form adan. For a long time this word therefore referred only to the three “houses” or kindreds of the “Elf-friends” or Elendili; and always tended to refer primarily to them. But when the Eldar became aware of other kinds of Men (more or less parallel to their own division into Eldar and Avari) they distinguished the Elendili as Núnatani, Dúnedain (pl. of Dún·adan) “western men” ... Other men were called Hrónatani, Rhúnedain [Easterlings] (PE17/18).

Thus while Atan applied to all humans, there was a bias towards considering the Elf-friends as the “true Men”, and Atan was sometimes used only to refer to them. Tolkien typically translated this word as “Man”, but the Elvish word has no particular association with the male gender, and actually means “the Second” (S/103; WJ/403; PE17/18) being related to the word atta “two”, referring to the fact that Men were the second-born race of the children of Eru.

Conceptual Development: ᴹQ. Atan seems to have been coined in the 1940s, for example appearing in the phrase ᴹQ. atani koitar endoresse “men live in Middle-earth” in the Quenya Verbal System document from this period (PE22/125).

The last description of this word’s origin appeared in notes from the late 1960s, where Tolkien said it was instead borrowed from the language of Men: “The name is said to have been derived from atan ‘man, human being as distinct from creatures’, a word used by that kindred which the Eldar first encountered in Beleriand” (PM/324 note #38).

However, as pointed out by Christopher Tolkien: “The statement here that Atani was derived from a word in the Bëorian language, atan ‘man’, contradicts what was said in the chapter Of the Coming of Men into the West that was added to the Quenta Silmarillion”, referring to the footnote on WJ/219 in Silmarillion drafts from the 1950s. This footnote was the same scenario as described above where Atan meant “the Second”, which is also how the origin of the word was described in the Quendi and Eldar essay of 1959-60 (WJ/386). It is this scenario that Christopher Tolkien used in the published version of the Silmarillion (S/103, 143; SI/Atani).