Netlify Identity is a service that allows developers to add login and user permissions functionality to their web applications without requiring extensive coding knowledge. The service provides pre-rendered authentication solutions, including external OAuth providers such as GitHub, GitLab, Google, and Bitbucket. By integrating Netlify Identity into an Angular application created with the Angular CLI, Scully, and Netlify Edge, developers can easily add login functionality to their site. The service also enables role assignment for users, allowing administrators to manage user permissions and access levels. With Netlify Identity, developers can focus on building their applications without worrying about complicated authentication processes.