A DAO is a decentralized autonomous organization. A DAO’s core consists of open-source code controlled by the organization members, and typically without any kind of management structure or board of directors, as the rules are written into the code.
If a DAO wants to change the code, community members of the DAO could then vote on a new proposition for the code. DAOs can continually improve and grow because the community can submit and vote on new changes to the code. Generally, a DAO will launch with a set number of tokens which may be distributed to the community. Every token is essentially one vote, so the more tokens you have, the more voting power you carry.
This gives tokens a price and utility, and of course allows the DAO to continually innovate with the world.
To further grasp what a DAO is, let's use the vending machine analogy. A vending machine is a machine that has one job, to dispense stuff; however, it still needs humans to operate it. There needs to be someone to check the inventory, someone to order more products, eventually leading to someone who has to stock the machine, and finally someone to collect all the money.
All that being said, if you were to turn a vending machine into a DAO, all the jobs that were done by humans would be done automatically through code instead. So, the vending machine would check its own inventory, send the order to the distribution center, have a robot stock the product, and then the machine would automatically send the currency to the wallet address of the business.
Now that we understand what a DAO is in the macro, we can take a look at the ENS DAO specifically.