a dynamic site is automated. A static site is not.
In a static site, let say a portfolio site, portfolio you could have 10 pages; each page representing a piece in your portfolio.
you would need 10 HTML documents, any time you change something you would need to go to THAT specific document and make alteration to the HTML and re upload. If you needed to change something that was present in the whole site you would need to alter all 10 documents, making sire their relationships stays intact. Fun!
The same site, done dynamically may have as little as ONE php/asp TEMPLATE PAGE. The template page would read a variable thsi could be part of the URL, or passed via GET/POST methods, which it would use to call data (your content) off a database. It would then flow the data into the template which would DYNAMICALLY output as HTML and be served to the user. When you update a dynamic page ( usually) you update the database and not the template, all content and relationships are automatically updated.