I've often wondered, how do the Oscars work? How are people nominated, who votes, how do they win? etc. etc.
The nominees and winners are both chosen exclusively by members of the Academy of Motion Picture Arts & Sciences (AMPAS or “The Academy” for short).
Production and distribution companies send free copies of movies that they think might win Oscars to members of the Academy in the hopes that they will watch the movies and vote for them. In reality, there is no obligation on the members to see any movies at all to nominate or vote, and most members ignore or give away their screeners.
Nominations are completely open to eligible films and Academy members simply write in a list of the movies that they think should be nominated. The total nominations for each film in each category are tallied and the top ten are included in the final ballot. The members get a final ballot and vote, highest number of votes wins each category.
Members only vote in a few categories each. All members can nominate and vote on Best Picture. All other categories are only voted on by academy members who work in those categories. So directors vote for best director, actors vote for best actor, composers vote on best original score, etc.
To become a member of the academy, you must be a film professional actively working and if I recall correctly there’s a sponsorship process. It’s not exactly easy to become a member but pretty much anyone who has worked on a film over a certain budget can be eligible.
As I mentioned, there’s no requirement that members see any films before voting, which means many members vote on the movies that they and/or their friends worked on. Of course most members of the academy work in film because they love films, so they usually have seen at least some of the nominees for personal reasons and may vote in favor of work that they honestly believe is the best they’ve seen that year.