Interpreted by Geoffrey of Monmouth as the "isle of apples," Avalon is where Arthur's sword Excalibur was forged and where he received it from the Lady of the Lake. It is the place that much folklore indicates as Arthur's final earthly destination, where he was conveyed upon receiving his mortal wound from Mordred.
The origin of the name is unclear because the Welsh called the island Ynys Avallach, after the overlord of the place, while the Latin derivation in Insula Avallonis, referring to the "isle of apples," indicating that the island was paradisical or magical. Several descriptions of the island indicate that it is indeed a whimsical place, as illustrated by the following summary by Manguel and Guadalupi:
A small church was built here by Joseph of Arimathea; the rest of the island is inhabited by a race of women who know all the magic in the world. It was here that King Arthur came with Merlin and a hand reached out of the water and offered him the sword Excalibur, which served him throughout his life. It is said that the hand belonged to the Lady of the Lake. Having received the sword in Avalon, Arthur was required to return it there upon his death. Sir Bedivere (or Percival) threw Excalibur back into the lake and the same hand appeared again, caught the sword, and brandished it before disappearing. King Arthur returned to Avalon to die, and from here he as borne by four queens - Morgan le Fay, the Lady of the Lake, the Queen of Northgales and the Queen of the Wastelands - on his last voyage. The island itself is a place of lakes and rock, with deep meadows and wooded hollows, where no wind blows and rain, hail, and snow have never been known to fall.
Some schools of thought hold that Arthur is still alive in Avalon and will return to Britain to be their future king. Other beliefs are that Glastonbury is the site of the true Avalon, and that Arthur is buried there.
Taken from Lady Pendragon Vol.3, #2