It is natural / Es ist natürlich. Natural/natürlich is used as adjective (and is part of the predicate).
Natürlich(2) gehen wir zu deinem Geburtstag. Of course we will come to your birthday party. Here Natürlich(2)/of course is an adverb. Natürlich(2) is not the same natürlich as above.
I agree. But when ask for a translation for nothing else than "naturlich" written with no punctuation next to it, just simply thrown on the screen like a disregarded piece of vocabulary, one would have no idea wether you are talking about "natural" or "of course" especially if its written with a lower case "n".