Whom or what did Azazel signify in the Old Testament?

The Azazel Goat and Atonement discusses the meaning of "Azazel":

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"This name was used for that of an evil demon … . The name Azazel … is also used by the Arabs as that of an evil demon" (William Gesenius, Hebrew-Chaldee Lexicon, p. 617).

"The high priest … cast lots upon the two goats. One was to be for the Lord for a sin-offering. The other was for Azazel (the completely separate one, the evil spirit regarded as dwelling in the desert), to be sent away alive into the wilderness" (F. Watson, The Cambridge Companion to the Bible, 1893, p. 161).

"Azazel … was probably a demonic being … . Apocryphal Jewish works, composed in the last few centuries before the Christian era, tell of angels who were lured … into rebellion against God. In these writings, Azazel is one of the two leaders of the rebellion. And posttalmudic documents tell a similar story about two rebel angels, Uzza and Azzael-both variations of the name Azazel. These mythological stories, which must have been widely known, seem to confirm the essentially demonic character of the old biblical Azazel" (Union of American Hebrew Congregations, The Torah — a Modern Commentary, p. 859).

Notice how well this understanding of Azazel fits with the fate of the demons.

In Revelation 20:1-3 "Then I saw an angel coming down from heaven, having the key to the bottomless pit and a great chain in his hand. He laid hold of the dragon, that serpent of old, who is the Devil and Satan, and bound him for a thousand years; and he cast him into the bottomless pit, and shut him up, and set a seal on him, so that he should deceive the nations no more till the thousand years were finished. But after these things he must be released for a little while."

This is very similar to the statement in Leviticus 16:21. "Aaron shall lay both his hands on the head of the live goat, confess over it all the iniquities of the children of Israel, and all their transgressions, concerning all their sins, putting them on the head of the goat, and shall send it away into the wilderness by the hand of a suitable man." This is a symbol of the angel that is to take Satan away and isolate him from mankind.

The Bible states over and over that God is just and fair, that He ultimately takes care of evil. Psalms 7:11 states: "God is a just judge, and God is angry with the wicked every day." Doesn't it make sense that a just and fair God would ultimately put the sins of the world on the one who introduced sin into the present world in the Garden of Eden? Satan is the one who from the very beginning lied to Eve and led mankind astray.

The Day of Atonement then should be understood as a day of justice! A day when God will remove the evil influence that is at the core of the problems of this present world.
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One reader added this comment:

The two goats were to all intents and purposes identical, not just in that they were both male and without spot or blemish but also in appearance,cost, size, weight and time of selection. (Jewishencyclopedia.com)
The point is that the high priest was not able to tell them apart and it took God to identify which was to be which by the casting of lots. By God choosing which goat was which He is showing us exactly who it is that has paid the penalty for our sins and He is also showing us exactly upon whose head the responsibility for all sin lies. Additionally, He is showing us that unless He reveals it to us we will not be able to tell the difference. Revelation 12:9 shows us that Satan has deceived the whole world.
Consider also why it took a strong man to lead the scapegoat into the wilderness. Goats are strong. I remember my dad had a male goat that was forever getting out of it’s pen. It took a lot of muscle to get it back in because it struggled so much. Contrast that with John 10:11 and 18. When the time came for Jesus to be sacrificed He did it willingly. No one had to lead Him and no one released Him.