Panocracy is a redesign of our society that tries to maximize human cooperation and individual freedom at the same time. Today people are divided into nations, where some have a lot of freedom and others less.
Freedom is a very subjective term and has different meanings around the world, U.S citizen would fight for their freedom to carry weapons, while Swiss citizens would do the same for their freedom and right to participate in the decision making process, because of the direct democracy.
Now there is a ongoing effort to spread "democracy" throughout the world, but very often this "democracy" means that the people can choose now their leaders and do not get any real rights to participate. This is called a representative Democracy, we could now argue if this is the best form of democracy (there are many more here). Or we could evolve into a custom fitted one :)
Now imagine a society where everybody could choose his or her jurisdiction (this is called Panarchy) freely or create their own. What probably would happen is that those "societies" with the most individual freedom and the best adapted "democracy form" would thrive and people would freely gather there. On the other hand, any hierarchic society where some have advantages over others would probably fall apart, because people would just move where they are free.
In a Panocracy, communities do not compete like our nations to become the world most powerful, but cooperate like cells in every organism. To understand Panocracy it is helpful to imagine our society as an huge organism. Individuals will join so called Moy-Cells freely, these can show differences in their decision making process, where some will have a direct democracy, others consensus, delegative democracy, etc. The Moy-Cell would be your "neighborhood" and the fundamental social structure, where people work, eat, live etc. A bunch of those Cells would create a bigger cell, which would get different responsibilities because it has different opportunities (more people pooled together). This model scales infinitely and is a so called bottom up approach, instead of a top-down like current nations. Those cells would pop up and go down and only those would stay that are very suitable for cooperative environments.