Geotextile layers are a very comprehensive means of soil stabilization through reinforcement.
The primary purpose is to provide tensile reinforcement just like steel does for concrete, so as to create a confining pressure in the soil to prevent slippage, caving, or any kind of soil deformation. Other than that, geotextiles can help achieve higher grades of compaction, easier and steeper slope stabilization, and check erosion.
The mechanism is fairly similar to that of steel reinforcement in concrete. The geotextile layers are fairly good in resisting tension, and there is a great deal of friction between the soil and the geotextile. When soil is loaded vertically, it tends to bulge horizontally, but there exists a counteracting shear stress creating a reverse confining pressure in the soil and preventing deformations.
Other than the above, geotextile layers have also been used to replace inclined retaining walls partially, subgrade stabilization and base reinforcement in roads, maintaining railway trackbed levels and geometry, preventing rainfall erosion isolation of base and subgrade of sports pitches and even reinforcement of retaining walls.