In practice a DAO is a governance contract, a treasury, and a forum. Holders of a governance-token submit and vote on proposals, and approved ones execute automatically, often after a timelock delay that lets people exit if they disagree.
Decentralisation is usually partial. Turnout is frequently in the low single digits, a handful of large holders or delegates decide most votes, and a core team retains emergency powers through a multisig-wallet. Reading who actually holds voting power tells you far more than the label does.
There is also unresolved legal exposure. Courts in some jurisdictions have treated DAO participants as general partners, which could mean personal liability, and regulators have pursued DAOs as unregistered entities. Voting in one is not a cost-free act everywhere.
Related: governance-token, governance-proposal, governance-quorum, protocol-treasury