Despotism is a way of ruling in which the leader has total, unchecked power. Joseph Stalin purged the Soviet Union of all his opponents in order to rule the country through despotism. He didn’t have many friends.
Despotism can also describe tyranny, the wielding of power through cruelty and terror. It's often used in reference to a country that's ruled by a dictator, but despotism can describe any situation characterized by oppression and threats. When your sister threatens to send all of your friends embarrassing baby photos of you if you don’t let her control the TV remote, that’s despotism.