Dynamic form fields work in tandem with single select form fields such as radio buttons or select "dropdowns".
A common use case is when there is a list of items to choose from on the form and also an option for "Other" when none of the selections apply and you want to collect details about this "Other" selection.
In the example below when the "Other" option is selected the "Enter your industry" field appears:
To add a dynamic field, use the "Dynamic behaviour" option in the form editor:
More form settings
Read more about working with forms such as styles, standard and custom fields, display options, subscriptions, etc.