Novel azo-containing sol–gel films exhibiting outstanding properties for optical applications via nonlocal photoisomerization gratings were reported recently, although the underlying mechanisms were not well understood, especially regarding the unexpected non-local effect. Here, this photoisomerizable sol–gel material is characterized in-depth, analyzing the design and fabrication strategy, and discussing the aspects that enable the efficient photoresponse, with focus on the holographic recording. The material consists of an azochromophore-rich silica matrix containing glycidoxypropyl groups, which provide increased flexibility and internal free volume for improved dye photoresponse. The matrix characteristics allow a novel procedure for fabrication of thick optical films, in which chromophore aggregation is ruptured by thermal annealing while keeping the material centrosymmetry (beneficial for high hologram contrast). The molecular photo-orientation promotes alignment of microscopic domains in a cooperative motion, not reported previously in sol–gel materials. This collective mechanism enhances the material response and explains some intriguing features of photoisomerization gratings. In particular, there is evidence that spatially shifted domains are related to the grating nonlocal nature. Different recording (write–erase–write) procedures that distinctly affect the photoalignment at both molecular and microscopic level are studied. The holographic performance drastically changes, which can be selectively exploited for either long-term or dynamic holography.