Enhanced hybridization in the electronic ground state of the intercalated honeycomb iridate <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"><mml:mrow><mml:msub><mml:mi>Ag</mml:mi><mml:mn>3</mml:mn></mml:msub><mml:mi>Li</mml:mi><mml:msub><mml:mi>Ir</mml:mi><mml:mn>2</mml:mn></mml:msub><mml:msub><mml:mi mathvariant="normal">O</mml:mi><mml:mn>6</mml:mn></mml:msub></mml:mrow></mml:math>

We use x-ray spectroscopy at Ir L$_3$/L$_2$ absorption edge to study powder samples of the intercalated honeycomb magnet Ag$_3$LiIr$_2$O$_6$. Based on and resonant inelastic scattering measurements, exact diagonalization calculations including next-neighbour Ir-Ir electron hoping integrals, we argue that intercalation Ag atoms results in a nearly itinerant electronic structure with enhanced Ir-O hybridization. As result departure from local relativistic $j_{\rm eff}\! = \!1/2$ state, find relative orbital contribution magnetic moment is increased, magnetization density spatially extended asymmetric. Our confirm importance metal - ligand hybridazation magnetism transition oxides provide empirical guidance for understanding collective iridates.