Etymology

Geoffrey of Monmouth called it in Latin Insula Avallonis in the Historia. In the later Vita Merlini he called it Insula Pomorum the "isle of apples".

In Geoffrey of Monmouth

According to Geoffrey in the Historia and much subsequent literature which he inspired, Avalon is the place where King Arthur was taken after fighting Mordred at the Battle of Camlann to recover from his wounds. Welsh, Cornish and Breton tradition claimed that Arthur had never really died, but would inexorably return to lead his people against their enemies as discussed in King Arthur's messianic return. The Historia also states it is where his sword Caliburn (Excalibur) was forged. Geoffrey dealt with Avalon in more detail again in his Vita Merlini, in which he describes for the first time in Arthurian legend the enchantress Morgan le Fay as the chief of nine sisters who live on Avalon. Geoffrey's description of the island indicates a sea voyage was needed to get there. His description shows the magical nature of the island:

The island of apples which men call “The Fortunate Isle” gets its name from the fact that it produces all things of itself; the fields there have no need of the ploughs of the farmers and all cultivation is lacking except what nature provides. Of its own accord it produces grain and grapes, and apple trees grow in its woods from the close-clipped grass. The ground of its own accord produces everything instead of merely grass, and people live there a hundred years or more. There nine sisters rule by a pleasing set of laws those who come to them from our country.

Given the way Geoffrey's account fits in with Celtic legend and Geoffrey's use of other folk traditions concerning Arthur it seems likely that in mentioning Avalon Geoffrey was recounting a genuine tradition dealing with Arthur's expected return, though Geoffrey may very well have elaborated on the details.Avalon in Norris J. Lacy, Editor, The Arthurian Encyclopedia (1986 Peter Bedrick Books, New York)."Glastonbury: Alternative Histories", in Ronald Hutton, Witches, Druids and King Arthur

Connection to Glastonbury

Around 1190 Avalon became associated with Glastonbury, when monks at Glastonbury Abbey claimed to have discovered the bones of Arthur and his queen. It is in the work of Giraldus Cambrensis we find this connection made for the first time and it clearly draws on Geoffrey:

What is now known as Glastonbury used, in ancient times, to be called the Isle of Avalon. It is virtually an island, for it is completely surrounded by marshlands. In Welsh it is called 'Ynys Afallach', which means the Island of Apples and this fruit used to grow there in great abundance. After the Battle of Camlann, a noblewoman called Morgan, who was the ruler and patroness of these parts as well as being a close blood-relation of King Arthur, carried him off to the island, now known as Glastonbury, so that his wounds could be cared for. Years ago the district had also been called 'Ynys Gutrin' in Welsh, that is the Island of Glass, and from these words the invading Saxons later coined the place-name 'Glastingebury.'