What is docker daemon

In short, docker daemon acts as a server and exposes APIs to Docker client CLI and other third parties consumers. Altogether docker architectured as a client server based implementation.
Let’s also understand the basics about how docker works 
Docker is a platform which allows DevOps teams to package the applications and run in containers.
These docker containers talks directly to Operating system kernel to perform activities and keeps the applications and dependencies independently from machines. Docker container can even  run on Virtual machines as well. 
What is Kernel ?
Kernel is the core of any Operating system. Kernel has complete control on OS and connects hardware  and softwares.