When used in the context of cryptocurrency and blockchain technology a DAO is a Decentralized Autonomous Organization. It is a self governing organization whose rules are embedded into the blockchain via smart contracts. There is no centralized server or entity overwatching the organizations operations, a group of shareholders have a say in the direction which the organization will take.
Make no mistake that DAOs do have a central manager who has a say in the voting rules and decides who the members will be. In a way a DAO is a true democratic organization where every proposal can be verified on the blockchain for the amount of votes it has received.
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