In a DAO, governance is achieved through a democratic process where token holders participate in voting on proposals that affect the organization. Unlike traditional organizations, DAOs operate without centralized leadership, allowing members to collectively set rules, allocate funds, and make strategic decisions. This process is often facilitated by smart contracts on a blockchain, ensuring transparency and immutability of the decisions made. DAOs can be used in various sectors, from finance (DeFi) to content creation and social initiatives.