A dynamic IP address is a temporary IP number, dynamically or randomly generated by a DHCP server. The address lasts only as long as the server allots, usually in the space of a day or two. When the IP address expires, the client is automatically reassigned a new IP address, ensuring smooth communication.
If you are using your wireless router to share an Internet connection, your ISP might have assigned you a dynamic IP address, which you use when configuring your router.