Reading: Universal Methods of Design by Bella Martin and Bruce Hanington.
Participatory design is a bit broader than the other concepts previously discussed. It refers to, during most of the design process, having an active communication and engagement between the design team and the user(s). There are many ways of going about this, including, but not limited to: Cultural Probes, face-to-face activity-based co-design, or diary studies*. The point is simply that the users-to-be are directly involved in impacting the design process. How one goes about a specific type of Participatory Design (Should we use Cultural Probing? Or Diary Studies? etc.) is really up to the team. While you can mix and match methods with their own various strengths, there is likely no “Correct” answer, as this is heavily based on context. For example, in person interviews are not the greatest if your audience is across the country.
*It should be noted that Diary Studies are similar to Cultural Probes, but instead of a kit, the user interacts with a guided diary over a significant period of time.