The word dynamic emphasizes that the content is regenerated every time a user visits or reloads the site. The content is tailored based on the date, user, country and many more other parameters.
Dynamic website suit businesses of all sizes that require regular updates. They are used when the sites are very large.
With a dynamic website, Web Pages (HTML Pages) are created to present information, but all the contents of the site are held in a database (back end). This means if you want to update the contents of the site, all you need to do is update the database. There are a variety of languages available to make dynamic website.