That's a hereditary system. Historically monarchy were hereditary and life long, but succession can be by the will of the previous monarch, appointed, or even democratically elected.
Monarchy really only means that's there's one person at the top of a hierarchy. There can be few or many people below dealing with the actual work, and the responsibility of the system can be outlined by a constitution or absolute.
Most monarchies can behave as a dictatorship if the monarch acts as a dictator. Monarchy and Dictatorship are two terms for describing autocracies, and there's a lot of overlap between the two, but neither require or disallow hereditary succession, although monarchies usually end up with it.