Geoffrey writes more at length on Avalon in his "Vita Merlini" than in the Historia. He likens it to the Fortunate Isles of classical myth but over western waters. Presided over by Morgen (Morgan le Fay), a kind enchantress and healer who leads a sisterhood of nine. This description echoes the Welsh poem "The Spoils of Annwfn" with it's nine Otherworld maidens and real groups of island dwelling Celtic priestesses like those noted by Plutarch in the first century CE. Arthur is placed on a golden bed and can only be healed by entrusting his care to Morgen completely for a long time.
Avalon is often taken as a refuge of spirits but the point of Arthur's residence there is that he is not dead, but magically alive and awaiting the moment of his return.
In 1191, when the monks of Glastonbury uncovered the "tomb" of Arthur, they claimed that Glastonbury Tor, which resonated with an aura of pagan uneasiness, was the famed isle for it was once almost encircled by water. The association passed into Grail literature that drew on Glastonbury's ancient Christian history (it is said that this was the monastery founded by Joseph of Arimathea who, bearing the Holy Grail, allegedly came to Britain after the crucifixion).
Thus there are two meanings attached to Avalon; that of Glastonbury and that of mystical otherworld. In both examples it is the final resting place of the King but at Glastonbury it is his burial site and the other is the place of his healing and retreat from the world as well as the source of his immortality.