What is limited monarchy?

"Limited monarchy" is not a term generally used by countries who have the type of monarchy alluded to by the phrase. Generally, "limited monarchy" simply refers to a type of government that includes a parliament, elected officials, and democracy, but also has a monarch—as opposed to an absolute monarchy, in which the monarch has the ultimate power of law-making and governance.
The most prominent example of a limited monarchy in the modern world is the House of Windsor, which exerts a constitutional monarchy over the United Kingdom of Great Britain and Northern Ireland and its Commonwealth, which includes countries including Canada and Australia. In a situation such as this one, the monarch is the head of state, but it is his or her government which actually makes the decisions, although technically he or she could put a stop to laws he or she does not like. In practice, the heads of state in the House of Windsor have opted not to participate in political matters since the time of George V. Other constitutional monarchies include Japan, the Netherlands, and Spain.