I'm a little confused why this doesn't mean 'She ate oranges'? What about this sentence makes it 'used to eat'?
The 'ti' in 'khati" indicates a habit. The last word 'thi' means this is in the past. I've been studying Hindi for a LONG time but I'm not native so take my Hindi with a grain of namak.
खाती थी is what makes it mean used to eat. It tells that she used to do the activity in the past.
to say she ate oranges, i think you would say "उसने संतरे खाये"