Atomic clocks

For her seventh birthday, the older mini-W was given a clock that projects its time on to the ceiling. I have to say it's quite neat. It also checks the time with an atomic clock in Rugby by means of a radio signal. Why Rugby? And how, exactly, do atomic clocks work? I expect they have some polonium 210 or similar inside. Quite why this makes them better at telling the time though, I'm really not sure. It may be the mini-Ws will learn about it at school and explain it all to me in due course.