[kamray23]

Imagine that you have a network which connects millions upon millions of devices and which has two inherent properties we care about here: it keeps track of tokens, and it can keep track of and execute pieces of code you upload to it in exchange for those tokens.

A DAO is a piece of code which performs all the functions you would expect an organisation to perform. It, entirely automatically, keeps track of its finances, provides services, and makes sure it has enough tokens to keep running. It can even provide some means for control, perhaps even a voting system. Uploading it to the network makes that piece of code permanent, both unremovable and uneditable. Since it exists autonomously across a network of millions of machine, and behaves like an organisation, we call it a decentralised autonomous organisation.

Then imagine accidentally writing in a bug you didn't catch. Yeah, there goes the DAO. These things have in the past caused major online financial crises because they are code and have bugs.