DAOs or "Decentralized Autonomous Organizations", are collective leadership structures made out of combinations of community members, communally elected leadership and open operating procedures. At its most basic, a DAO operates as it is defined: Autonomously and Decentralized.
Functionally, a DAO begins with community driven action to establish a leadership structure. Some DAOs may hold elections for a board to run the organization, others may nominate an initial leader(s) to oversee the establishment of an organization under the direction of a community. But by the end of the initial phase, an organization built upon communally agreed to Bylaws and Leadership should be left.
From there, the day-to-day operations of the DAO (and the organization it governs) are largely handled by the governing body elected by the community, as the community defines them. Any changes to the governance are decided on by the community, usually through communal voting protocols (like the Render Network's RNP system).