Some of the most poorly understood words are: theism, atheism, and agnosticism. In the following paragraphs, I will attempt to provide a definitional framework for the three words. I'm confident that many people who read this will still choose to define the words differently than I. The purpose of the definitions is not to establish some sort of absolute truth but to provide a working definition that at least I can point to and say, "this is what I think the definition is, and this is how I use these words". If you find the definitions useful, feel free to 'label' yourself using them and direct anyone to this site who doesn't know why you call yourself by one (or more) of these terms.
Perhaps the biggest reason the above words are misunderstood is that theists tend to define atheism, atheists tend to define theism, and people who call themselves agnostics don't want to belong to either of the definitions the other two parties have given to each other.
First I will begin with atheism, which will also be the main focus throughout since I think it is the most misunderstood and poorly defined of the three. At the above linked definition of "atheism" someone called R. Hall says, "Atheism is a ferocious system, that leaves nothing above us to excite awe, nor around us to awaken tenderness". This is just one example of a theist incorrectly defining atheism. Atheism is not a system (ferocious or otherwise), it says nothing about what is above us, it says nothing about tenderness, and atheists can be just as excited and awed about life as theists. The atheists I know and have read are, on average, more excited and awed by the wonders of life than theists. This statement is not intended to knock theists, but merely to point out that the above definition is a false generalization that has nothing to do with the 'real' definition of atheism.
There are several other false definitions usually put on atheism by theists. Theists frequently claim (and if you don't believe me I can send you countless emails I have received from theists or you can read their definitions on the web for yourself) that atheists "claim to know there is no god", "are merely rebelling against a god that they really believe in", "think they can prove there is no god", "say there is no god so that they can be evil", "don't want to be accountable", etc.
Although some atheists (and they are in the minority) may claim to know that there is no god, most atheists claim no such thing. Atheism is a "lack of belief in god" and nothing more. Those who claim to "know" there is no god are sometimes referred to as "strong atheists", but their thinking is as faulty as those who claim to know that there is a god. Atheists who don't go as far as claiming knowledge of no god can also be called "strong atheists". For instance, atheists who claim an affirmative belief that there is no god usually are also referred to as "strong atheists" even though they do not claim knowledge of such a thing. For now, let me just state that no one can know there is no god for the same reason that no one can know there is no Santa Claus, Easter Bunny, unicorn, or other such creature. Some may say that we can know that there are none of the above since we can trace through history where these characters were created and that the ideas about them have changed over the centuries. The same can also be said of god (except the history of god goes back a bit farther so it is more difficult to track with certainty) but for this arguments sake, let's say that such creatures, although there is a strong probability that they are fictional, can not be 100% positively proven unreal for the basic reason that the entire universe would need to be explored to positively assert the non-existence of such a hypothetical being. If the theist attempts to define their god however, that specific god can be disproven through the use of logic and reason. In these cases, an atheist can accurately state that they know that the god described does not exist.
To summarize, atheism is a lack of belief in god. Basic atheism (of the non-strong variety) on its own does not positively assert anything regardless of what some atheists may say or think and regardless of what theists frequently define as atheism.
Now let's move on to theism briefly. Theism is simply the opposite of atheism. A good definition of theism is "a positive assertion that god does exist". Whatever this god may be to the theist is irrelevant to the definition of theism as a word on its own. Based on these two definitions, everyone is either a theist or an atheist. Either you positively assert that there is a god or you lack such a positive assertion. There is no middle ground--which brings us to our third word of agnosticism.
When you break down the word agnostic, you come up with a term meaning "without knowledge" or "unknowable". The word agnostic isn't a very old word. Despite this fact, T.H. Huxley, who created the term, used it to mean our modern definition of 'scientist' more than anything else. The word has changed meaning over the years, and people have tended to use the term as a sort of middle ground between atheism and theism. In my opinion, such a middle ground doesn't exist. One either asserts that there is a god or they lack such an assertion. Agnostics have labeled themselves as such because they don't understand the definition of atheism or because they have heard only about the 'strong atheists' who do make a positive assertion that there is no god and they don't personally hold such a strong assertion.
My definition of agnostic is probably different from any that you have previously heard. My (modern) definition is that virtually everyone is an agnostic. That's right, almost everyone is either an agnostic/atheist or they are an agnostic/theist because no one can 'know' god. Atheists probably don't have a problem with this definition, but I'd be willing to bet that many theists who are reading this don't appreciate being labeled an agnostic.
The reason I claim that no one can know god is this. Many who believe in god don't claim any first hand knowledge. They will tell you that there belief comes from feelings, reliance on scripture, or their wanting to believe. Those people are fairly easy to rule out as non-agnostics as they really don't assert knowledge in the first place. They can readily be dubbed agnostics because they are without knowledge of their belief. Their belief is simply a belief and nothing more. The slightly-more-difficult-to-dub agnostic variety of theists are those that claim first hand knowledge. The main problem with these people is this first hand knowledge they assert is always based on personal experience rather than any sort of tangible proof or external evidence. Some claim to converse with, see, or otherwise personally experience god. The issue with these claims, and my reason for still labeling these people as agnostics, is that all of their personal experiences, 1) more or less contradict the personal experiences of others who claim this same 'knowledge' and 2) can't be shown to others (especially skeptics, scientists, or others who want to see proof).
Knowledge in any item isn't something based solely on personal experience. If I have a personal experience that gives me knowledge, I should be able to share that knowledge in a verifiable manner with others so that they too can obtain this knowledge. For instance, if I figure out that the earth is round based on my personal experience of flying in the space shuttle and seeing first hand that it is round, I can share that knowledge with others either by having them also go in the space shuttle and view earth for themselves, or I can take photos or provide some other sort of evidence of my experience to others so that they too can obtain this knowledge. Their knowledge of the earth's shape is then based on reality rather than their own desires to believe or some other "non-proof". Real knowledge should be objective and capable of being tested, demonstrated, and/or experimentally verified. Given these factors, even those that claim 'knowledge' of god are agnostics as their 'knowledge' is really a misuse of the word. What they have isn't knowledge. What they have is a belief in their own experience and nothing more. If they had 'knowledge', they would be able to share it with the doubter, the evidence seeker, and those who don't already believe.
To conclude and summarize, both you and I are agnostics. Almost everyone is an agnostic (in the modern sense of the word) since none of us have any evidence, proof, or other tangible means of giving knowledge regarding any of the various versions of god that the masses currently believe in or have believed in the past. The few people who truly believe that they can prove or disprove the existence of god(s) probably could not be classified as agnostics under this frame of thought (although even this is debatable as one person's "proof" can be pure nonsense to another and would, therefore, leave the non-agnostic status only in the eyes of the person claiming the illogical "proof"). Everyone is either a theist or an atheist. If you answer the question, "Do you believe in god?" with an affirmative, then you are a theist. If your answer is "no" or "I don't know" then you are an atheist due to your lack of an affirmative belief.
"Why formulate hypothetical solutions to hypothetical problems when there are real problems at hand? ... the first problem being our desire to flee from the necessary by burying our heads in the hypothetical."
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-- Matt Berry A Human Strategy p. 107