Final answer:
Key Vault access policies are based on Azure's Role-Based Access Control and can be customized to grant specific permissions to users and applications for Key Vault resources such as keys, secrets, and certificates. These policies enforce the principle of least privilege by allowing granular control over what principals can do.
Step-by-step explanation:
Key Vault access policies are sets of permissions defined to control the access and operations that users and applications can perform on the Key Vault resources like keys, secrets, and certificates. These access policies are based on Azure's Role-Based Access Control (RBAC) mechanisms and can further be tailored to support specific scenarios such as granting a user the ability to read secrets, but not delete them, or allowing an application to manage keys but not access them directly.
To assign an access policy, a subscription owner or a user with enough permissions can specify the permissions on the Key Vault for each principal, which could be a user, a group, a managed identity, or an application registered in Azure Active Directory. The policies grant minimum privileges necessary for tasks, adhering to the principle of least privilege. For example, an application that only needs to decrypt data can be given the 'decrypt' permission without granting it the 'encrypt' permission.