Dynamic Range is the difference in light levels in an image, between the darkest and the brightest areas.
On an overcast day with little sun and few shadows, there will be a fairly low dynamic range, i.e. there will be no areas of deep black and no extreme bright spots. On a sunny day, however, in a scene with distinct shadows, there will be a greater difference between the brightest and darkest areas, and this is what we call a wide dynamic range or WDR (also known as High Dynamic Range, or HDR).
Figure 1: An IP camera without WDR capability.
Figure 2: An Axis IP camera in WDR mode.
There are also dynamic ranges that extend further than the camera or the human eye can perceive. One example is when you take a photo of a person in front of a bright window. The camera will either expose the person properly, rendering the scene through the window “washed out”, or it might give priority to the scene through the window, thus leaving the person underexposed and hard to see. In this case, the dynamic range of the scene is wider than the camera can handle.