Soren: You know, my head said to do one thing while-- while my gizzard was saying to do another.
Ezylryb: And you trusted your head. That's when you failed.
- Soren and Ezylryb, Legend of the Guardians: The Owls of Ga'hoole

From The Art of Legend of the Guardians: The Owls of Ga'hoole

The gizzard is an owl's second stomach. There are no digestive glands in the gizzard, and in birds of prey, it serves as a filter, holding back undigestible items such as bones, fur, teeth, and feathers. Some birds eat grit or small stones to aid with digestion.

Several hours after eating, the indigestible parts (fur, bones, teeth & feathers that are still in the gizzard) are compressed into a pellet the same shape as the gizzard.

In the Series

In the Guardians of Ga'Hoole series, the gizzard is also where the owls refer to keeping their inner feelings like compassion, intuition, and bravery. Similar to the human term "feeling it in your gut".

When owls become moon blinked or stone stunned, it is said their gizzards stop working and grow still. When an owl's gizzard stops its emotional functions, it may cause an owl to become emotionless, apathetic, lose its personality entirely and / or follow orders blindly.

Hagsfiends have very primitive gizzards, which do not affect emotions at all, making them inherently cruel creatures.