dazu
with it
Refers to something previously mentioned and means 'in addition to that', 'as a supplement'.
Ich esse einen Salat und trinke dazu ein Glas Wasser.
I'm eating a salad and drinking a glass of water with it.

to that / additionally
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with it
Refers to something previously mentioned and means 'in addition to that', 'as a supplement'.
Ich esse einen Salat und trinke dazu ein Glas Wasser.
I'm eating a salad and drinking a glass of water with it.

'Dazu' is a pronominal adverb and a compound of 'da' (there/that) and 'zu' (to). The 'da' always refers to something that was mentioned earlier in the conversation or text.
Wir brauchen Mehl, Eier und Zucker. Dazu kommt noch eine Prise Salz.
We need flour, eggs, and sugar. In addition, there is a pinch of salt.
To recognize the meaning, pay attention to the context. If 'dazu' refers to a concrete addition (e.g., food), it means 'in addition' or 'with it'. If it refers to a topic or question, it means 'on this topic' or 'about that'.
Ich nehme ein Schnitzel. Dazu bestelle ich einen kleinen Salat.
I'll have a schnitzel. With it, I'll order a small salad.
'Dazu' can also refer to a following action and replace or prepare a subordinate clause with 'um zu' (in order to) or 'dass' (that). It then connects a purpose or condition with a statement.
Um ein guter Musiker zu werden, muss man täglich üben. Dazu gehört viel Disziplin.
To become a good musician, you have to practice every day. That requires a lot of discipline.
The expression 'dazu gehören' means 'to be part of something'. It is often used to express what is considered normal or necessary for a certain situation or group.
Ein bisschen Aufregung vor einer Prüfung gehört einfach dazu.
A little nervousness before an exam is simply part of it.
The expression 'dazu kommen, etwas zu tun' means to find the time or opportunity to do something. It is very often used in the negative.
Ich wollte dich anrufen, bin aber leider nicht dazu gekommen.
I wanted to call you, but unfortunately I didn't get around to it.
'Dazulernen' means to acquire new skills or new knowledge, often through practical experience. It emphasizes a gain in competence over time.
Jeder macht Fehler, aber das Wichtigste ist, dass man daraus dazulernt.
Everyone makes mistakes, but the most important thing is that you learn from them.
so that / with it
'damit' and 'dazu' look similar and often refer to something that has already been mentioned. The difference comes from the small words 'mit' and 'zu'. 'damit' means 'with this thing' and fits when you mean a means, a tool, or something being used. 'dazu' means more like 'in addition' or 'on this topic'. Learners confuse the words because both begin with 'da-'. Ask yourself: Is it about 'mit etwas' (with something)? Then 'damit' fits. Is it about 'zu etwas' (to something / about something) or an addition? Then 'dazu' fits.

Bei den Eltern gab es Suppe, und dazu haben wir frisches Brot gegessen.
At my parents' place there was soup, and we ate fresh bread with it.
Lea hat ein neues Fahrrad, und damit fährt sie jeden Morgen zum Bahnhof.
Lea has a new bike, and she rides it to the train station every morning.