Azimuth is a general-purpose public-key infrastructure (PKI) on the Ethereum blockchain, used as a decentralized ledger for Urbit identities that we call points. Having a point is necessary to use the Urbit network, which makes it important to have a neutral ledger to determine who owns what.
Azimuth is not, however, part of the Arvo stack. Azimuth is a parallel system that be used as a generalized identity system for other projects. Azimuth "touches" the Urbit ecosystem when a point is used to boot a virtual computer on the Urbit network for the first time. When that happens, the point considered linked to Azimuth and the point’s full powers are available for use. Once a point is linked, it cannot be unlinked.
A metaphor might make the relationship between these two systems easier to understand: Azimuth is the bank vault that stores the deed to your house. The Urbit network is the neighborhood that you live in.