The AZW file type was developed by Amazon for use with their range of Kindle eBook readers. The proprietary format is used for eBooks that require DRM protection. The file format is the same as the MOBI file type which is used for eBooks that do not require DRM protection.
The AZW format is extremely similar to the MOBI format but boasts superior compression rates and also includes Amazon's own DRM. The DRM works by restricting usage of the file to the device id which is linked to the user details of the owner. A disadvantage of the format is that it does not allow for series related metadata to be added to the file.