Avatarhood would have little meaning if it were not connected with the evolution. The Hindu procession of the ten Avatars is itself, as it were, a parable of evolution. First the Fish Avatar, then the amphibian animal between land and water, then the land animal, then the Man-Lion Avatar, bridging man and animal, then man as a dwarf, small and undeveloped and physical but containing in himself the godhead and taking possession of existence, then the rajasic, sattwic, nirguna Avatars, leading the human development from the vital rajasic to the sattwic mental man and again to the overmental superman. Krishna, Buddha and Kalki depict the last three stages, the stages of the spiritual development-Krishna opens the possibility of overmind, Buddha tries to shoot beyond to the supreme liberation but that liberation is still negative, not returning upon earth to complete positively the evolution; Kalki is to correct this by bringing the Kingdom of the Divine upon earth, destroying the opposing Asura forces. The progression is striking and unmistakable.
  As for the lives in between the Avatar lives, it must be remembered that Krishna speaks of many lives in the past, not only a few supreme ones, and secondly while he speaks of himself as the Divine, in one passage he describes himself as a Vibhuti We may therefore fairly assume that in many lives he manifested as a Vibhuti veiling the fuller Divine Consciousness. If we admit that the object of Avatarhood is to lead the evolution, this is quite reasonable, the Divine appearing as Avatar in the great transitional stages and as Vibhutis to aid the lesser transition.

                                SRI AUROBINDO, On Yoga, II, tome I, part I, 7

The Avatar comes as the manifestation of the divine nature in the human nature, the apocalypse of its Christhood, Krishnahood, Buddhahood, in order that the human nature may by moulding its principle, thought, feeling, action, being on the lines of that Christhood, Krishnahood, Buddhahood transfigure itself into the divine. The law, the Dharma which the Avatar establishes is given for that purpose chiefly; the Christ, Krishna, Buddha stands in its centre as the gate, he makes through himself the way men shall follow. That is why each Incarnation holds before men his own example and declares of himself that he is the way and the gate; he declares too the oneness of his humanity with the divine being, declares that the Son of Man and the Father above from whom he has descended are one, that Krishna in the human body and the supreme Lord and friend of all creatures are but two revelations of the same divine Purushottama, revealed there in his own being, revealed here in the type of humanity.
                           

SRI AUROBINDO; Essays on the Gita, I, 15