One of the portions of Kashmir under Pakistani occupation. The name means Free Kashmir. Pakistan does not claim any of the former princely state of Jammu and Kashmir as its own territory, but wants to see an independent Muslim state there. (That's the theory anyway: in reality they'd probably be keen to annex it.) It funds an Azad Kashmir government to administer the region, which is almost half of Kashmir in area but is not so heavily populated. The capital is Muzaffarabad.
Other parts of Pakistani-controlled Kashmir are the Gilgit Agency, based on the town of Gilgit, and Baltistan, whose capital is at Skardu. These are federally-administered tribal areas similar to those on the Afghan border in Pakistan proper. These two together are known as the Northern Areas.