Delegated Proof-of-Stake (DPOS), a method invented by Dan Larimer, resolves many of the problems seen in POW and POS systems. In a Delegated Proof-of-Stake system, a technological democracy is created by a community of block producers and staked users that agree to a certain set of rules.
Delegated Proof-of-Stake and Proof-of-Stake are two different animals; in a POS system, every wallet that contains coins is able to participate in process of validating transactions and forming consensus, thus the more coins in your wallet, the more coins you will eventually receive. With DPOS system every wallet that contains coins is able to vote for representatives. These representatives validate transactions and form consensus, and are paid for their efforts through the system. This avoids a pitfall of POS, which is that, just like in POW, consolidation will eventually occur.
Now that we have those simple definitions out of the way, let’s turn our attention back to Larimer, and DPOS.