Avatars are the celestial and terrestrial powers capable of being called forth by summoners.
Avatars as Allies
Avatars can form pacts that allow adventurers to summon weaker versions of themselves. These "summoned avatars" are only a portion of the avatar's true strength.
Such avatars are capable of using powerful abilities: normal physical attack and Blood Pact abilities--both physical and magical--that require the summoner's MP to use. To maintain the avatar's presence, an Avatar Perpetuation Cost is required every tick.
Avatars as Enemies
Certain beastmen (such as Yagudo or Lamiae) have summoners within their ranks, and are capable of summoning avatars as adventurers do.
All avatars except Fenrir have a delay of 320, gaining 8.3TP/hit.
Fenrir is the exception as he hits faster with a delay of 280, gaining 7.4TP/hit.
Avatars have an innate Physical Damage Taken -50%. This does not apply to magical damage. All avatars are highly resistant to the elements they represent and are strong against.
At level 85, physical damage reduction for avatars is approximately -52.4% thanks to Stout Servant, meaning that they will take less than half damage from physical attacks. Tested via the Cactuar version of 1000 Needles, which deals physical damage. All avatars and Spirits tested took 476 damage from 1000 Needles when they were the only target in the area of effect. Source
The term "celestial avatar" is a player-given name due to their reference as "celestial beings" and their presence on the Stellar Map as constellations, and that they came before the Terrestrial Avatars in the origin of Vana'diel. In-game they are referred to as the "sleeping gods". Each of the six basic elements is governed by one Sleeping God. Also present in the constellations above Vana'diel are Alexander and Odin, referred to in-game by the epithets "Iron Colossus" and the "The Dark Rider". Although Alexander and Odin are not grouped with the Sleeping Gods in the game's script, the Stellar Chart is evidence of their origins being similar to the Sleeping Gods.
SPOILER WARNING: Details about a quest, mission or other Final Fantasy XI in-game storyline follow.
There exists two beings for each protocrystal avatar: one that is one of the original gods, and the other is a living being (as seen in the avatar legends).
The protocrystals were created as a result of the Zilart dividing the power of the mother crystals elementally, and containing it in a smaller form.
The sleeping gods call each other "the true gods" whereas they call the terrestrial avatars "the false gods" and look down on all who came after them.
The sleeping gods are currently in a slumber. When energy is sapped from them (such as by obtaining the "whisper" or "eye" key items), they are closer to awakening. When they awaken, they will try to restore Vana'diel to its original state (known as "paradise") which would only allow for Zilart and gods to live freely (and reduce the terrestrial avatars to mere beasts). It would also allow for the resurrection and death of Promathia, which would bring about the end of Vana'diel.
The sleeping gods also desire to restore the power of the "divided god" which is presumably the key to restoring paradise. The god is, more likely than not, Promathia, as a part of him is found in every lifeforce. Another, less likely possibility is Alexander, or it could just be their name for the true mothercrystal "Great Crystal" (before it was split into five parts by Altana in an effort to keep Promathia alive).
The Zilart also used the power of the sleeping gods to help heal Vana'diel after the war between the wyrms and the Zilart.
Connected to the Six Sleeping Gods by the constellations above Vana'diel, the avatars known as Alexander and Odin are prophesied to clash in the land of Aht Urhgan at the time of Judgment, "Ragnarok".
The terrestrial avatars are five powerful gods born of Vana'diel to protect the five mothercrystals. They--like any beast--can die, and if Vana'diel was restored to its original state of paradise, they would be reduced to mere animals.
A gigantic wolf summoned by Karaha-Baruha during the Great War, whose power was unleashed in a last-ditch effort to drive back the Shadow Lord's armies from the gates of Windurst. Fenrir aids the summoner with his command over darkness and abilities related to phases of the moon.
The term "temporal avatar" is a player-given name continuing in the pattern of celestial and terrestrial avatars. Atomos is revealed to be the avatar of time in Wings of the Goddess Missions, and is unrelated to the stars and the planet of Vana'diel. Atomos is the only unique (i.e., not a "clone" such as Tejas or Ogopogo) avatar independent from the celestial and terrestrial beings.
Cait Siths have been revealed to be avatars in the July 15, 2011 news update [1].
Mysterious beings born of the goddess Altana's tears and connected to the Cavernous Maws, Cait Siths have been watching the progress of the Crystal War. There are ten distinct Cait Siths, and a final composite Cait Sith consisting of the other Cait Siths combined into a single entity.