How do people decide who should be chosen as best director of a movie?

You must learn what the director does, then it will become evident.

Let me expand a bit on @Sagacious .

The director is the person whose artistic vision ties all the pieces of the movie together – choice of scenes, music, dialog and how it is delivered, plot tension, and so on and so forth.

The producer pulled together the operational aspects – budget, location, (usually) the actors, and lots of other details that make movies possible. But the director is the one responsible for ‘telling the story’ using the factors I mentioned above.

In short, a producer deals with money and facts, and the director figures out how to effectively tell the story.

To answer your question, @LostInParadise – the people voting on Best Director are really making an assessment – what director best told the story in the film?

First, he has to be a white male. Then go by what @elbanditoroso said.

It is judgement on the total package and how well it is all assembled. Which is why best picture so frequently coincides with best director.

Another analogy would be a still photographer. There are models and other subjects, and there may be set designers and clothing and makeup people. There might be a fashion house creating clothes for the shot.

But I think it’s easy to understand how the person with the camera is the artist who deserves credit for the beautiful photos.

One criteria could be, picking amongst five nominees whose films all told great stories and all well produced technically, a judge could give the top prize to the director of the film who has the most powerful emotional and psychological impact on said judge.

Who chooses the screenwriter? Wouldn’t that be the producer?

I would assume normally it’s the producer who chooses which script to produce or screenwriter to commission.