A Decentralized Autonomous Organization (DAO) is a system of rules for smart contracts on the Blockchain. Decentralized Autonomous Organizations regularly do not have a central authority or governing body.
Rather, governance rules are coded into smart contracts that allow all members to participate in the decision-making process through their stake in a decentralized manner. This leads to the fact that should changes be made to a DAO, the creation of a new code is necessary.
A prominent example is The DAO, which launched in June 2016 with $150 million in crowdfunding and was hacked shortly after, causing over $50 million in damages. This hack was reversed in the following weeks and the funds were restored via hard fork of the Ethereum blockchain. The decentralized bailout was made possible by a majority vote of the Ethereum community.