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Despotism is a form of government in which a single entity rules with absolute power. That entity may be an individual, as in an autocracy, or it may be a group, as in an oligarchy. The word despotism means to "rule in the fashion of a despot" and does not necessarily require a singular "despot", an individual.
Despot comes from the Greek despotes, which roughly means "master" or "one with power", and it has been used to translate a wide variety of titles and positions. It was used to describe the unlimited power and authority of the Pharaohs of Egypt, employed in the Byzantine court as a title of nobility, used by the rulers of Byzantine vassal states, and adopted as a title of the Byzantine Emperors. Thus, despot is found to have different meanings and interpretations at various times in history and can not be described by a single definition. This is similar to the other Greek titles basileus and autokrator, which, along with despot, have been used at various times to describe everything from a local chieftain to a simple ruler, king or emperor.
Colloquially, despot has been applied pejoratively to a person, particularly a head of state or government, who abuses their power and authority to oppress their people, subjects or subordinates. In this sense, it is similar to the pejorative connotations that have likewise arisen with the term tyrant. Dictator has also developed nearly similar pejorative connotations, though despot and tyrant tend to stress cruelty and even enjoyment therefrom, while dictator tends to imply more harshness or unfair implementation of law.
In its classical form, despotism is a state in which a single individual (the despot) wields all the power and authority embodying the state, and everyone else is a subsidiary person. This form of despotism was common in the first forms of statehood and civilization; the Pharaoh of Egypt is exemplary of the classical despot.
The term now implies tyrannical rule. Despotism can mean tyranny (dominance through threat of punishment and violence), or absolutism; or dictatorship (a form of government in which the ruler is an absolute dictator, not restricted by a constitution, laws or opposition, etc.)
However, in enlightened absolutism (also known as benevolent despotism), which came to prominence in 18th century Europe, absolute monarchs used their authority to institute a number of reforms in the political systems and societies of their countries. This movement was quite probably triggered by the ideals of the Age of Enlightenment.
The Enlightenment philosopher Montesquieu believed that despotism was an appropriate government for large states. Likewise, he believed that republics were suitable for small states and that monarchies were ideal for moderate-sized states.
Although the word has a pejorative meaning nowadays, it was once a legitimate title of office in the Byzantine Empire. Just as the word Byzantine is often used in a pejorative way, so the word despot now has equally negative connotations. In fact, Despot was an Imperial title, first used under Manuel I Komnenos (1143–1180) who created it for his appointed heir Alexius-Béla. According to Gyula Moravcsik, this title was a simple translation of Béla's Hungarian title úr, but other historians believe it comes from the ancient Greek despotes (literally, the master). In the Orthodox Liturgy, if celebrated in Greek, the priest is addressed by the deacon as Despot even today.
It was typically bestowed on sons-in-law and later sons of the Emperor and, beginning in the 13th century, it was bestowed to foreign princes. The Despot wore elaborate costumes similar to the Emperor's and had many privileges. Despots ruled over parts of the empire called Despotates.
In the United States Declaration of Independence, the British government is cited to have been reducing the American people under absolute despotism: "But when a long train of abuses and usurpations, pursuing invariably the same Object, evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security".
Contrast with absolute monarchy 
According to Montesquieu, the difference between absolute monarchy and despotism is that in the case of the monarchy, a single person governs with absolute power by fixed and established laws, whereas a despot governs by her or his own will and caprice.
See also 
- Dictionary of the History of Ideas: despotism