DAO stands for Decentralized Autonomous Organization. At its most basic level, a DAO is an organization that relies on no form of central authority to operate. Instead, DAOs make decisions based on the votes made by all the members of the organization. This system is automatized on the blockchain through the issuance of cryptographic tokens, which are used to vote on certain decisions, projects or changes proposed to the organization.
These organizations usually come together by means of crowdfunding. The funds are then used to carry out the project that it was created to do or projects that are proposed to the organization.