The purpose of the embassy in Evony Age 2 is same as in Age 1. There has been no change in the use of this building. However i remains vitally important.
The Embassy is used for maintaining relations with allies. A level 1 & above Embassy will allow you to join an existing alliance whereas a level 2 & above will let you host an alliance of your own.
The embassy also allows the army of your allies to garrison in your city. It is extremely important that you check the box “Allow allied members to garrison in your city” failing which your alliance members cannot help you by reinforcements if you are under attack.
Each level upgrade of the embassy allows more waves to be garrisoned in your city with level 1 allowing one wave of maximum 100,000 troops possible to a level 10 embassy allowing a total of 1,000,000 troops. The amount of troops per wave is governed by the Rally Spot level of the alliance member reinforcing you.
Allied troops will add to your food bill and that should always be taken into account. If your city runs out of food, the next city owned by you will start footing the food bill until no more food is available in any of your cities. In that event, allied troops will return back their respective owners. The embassy window will also allow you to send back garrisoned troops to their respective Lords.
It is common courtesy to reinforce your ally with food so that your troops do no become a problem for the lord who is already dealing with the headache of defending an attack.