The product owner is required to closely collaborate with the team on an ongoing basis and to guide and direct the team (e.g., by actively managing the product backlog, answering questions when they arise, providing feedback, and signing off work results.) In simple terms, the product owner sits in the driver’s seat, deciding what should be done and when the software should be shipped. The team decides how much work they can take on in a sprint and how the work is carried out.
Here is a good description of product ownership:
Download the complete drawing here: Product Owner in a Nutshell
Here is another good presentation by Roman Pichler, discussing key concepts and techniques to enable effective product ownership in an agile context.