This is the 61st most frequent Azerbaijani word.
olduğu
"Olduğu" means "that he/she/it is/was" or "being" in English, depending on the context.
The word 'olduğu' is used to connect the clause referring to the reason for being loved (being merciful).
Mərhəmətli olduğu üçün çox sevilir.
He/She is loved a lot because he/she is merciful.
Here, 'olduğu' specifies the location of the house to explain where the big garden is.
Evin olduğu yerdə böyük bir bağ var.
There is a big garden where the house is located.
In this case, 'olduğu' is part of an expression emphasizing that a statement was found to be true.