What is the Allay?
'This could be a collectible, something you've crafted, or a block you mined,' Mojang explained.
This means, giving an item to the mob allows it to search for duplicates of the given item and return it to you once it has collected a certain amount. However, the mob has some limitations, such as the inability to mine or gather resources such as diamonds, which can only be done by the player. The Allay also seems to be attracted to music. This could be useful since you could place down Noteblocks and it could simply drop the gathered items there.
Since we don't know everything about the adorable little creature, several questions have been raised, such as the possibility of it being hostile, where to find it, and how far it can travel to collect items. The Allay is not only adorable and cute, but it is also a very useful mob.