Zircon is the core platform that powers the Fuchsia OS.  Zircon is composed of a microkernel (source in kernel/...) as well as a small set of userspace services, drivers, and libraries (source in system/...) necessary for the system to boot, talk to hardware, load userspace processes and run them, etc.  Fuchsia builds a much larger OS on top of this foundation. 

Google changed the name for this project from Magenta to Zircon, which seems like an opportune time to highlight it.