In a proportional representation system, votes are counted to allocate seats in a legislature in proportion to the number of votes each party receives. This system ensures that smaller political parties have a chance to gain representation based on their share of the popular vote, contrasting with winner-takes-all models. For example, if a party receives 30% of the total votes, it will be allocated approximately 30% of the seats. This approach promotes a more diverse political landscape and can lead to more inclusive governance.