"A single player decision can cascade across a zone, changing the direction of a chain of events until they dramatically alter the content played by players in a map," explains lead content designer Colin Johanson before launching into a lengthy example.
If an enemy dredge army is marching out of their main base, players will be asked to mobilize with their allies and help destroy the army. If the dredge army is defeated, other events will cascade out from there. Players will be able battle their way inside the dredge base, face off against their commander, rescue captured friendly troops being held in the dredge prisons, and even hold the captured base while fighting waves of dredge, who arrive from deep underground to try and take back their home.
If, on the other hand, players fail to destroy the army, it will establish a fort in friendly player territory. From there, the dredge will send shipments of troops and supplies to the fort from the main base while building up walls, turrets, and siege engines to help defend it. Enemy dredge forces will then begin to move out from their newly established fort to attack friendly player locations in the area, sending snipers out into the hills, sending assault team forces to capture friendly player villages, and trying to smash down friendly fortifications with massive dredge walkers. All of these events continue to cascade out into further chains of events where cause and effect is directly related to the player's actions.
For example, if the players do not mobilize to stop the dredge snipers, they'll begin to shoot down all the villagers and merchants in nearby friendly villages. If they fail to stop the dredge assault teams from capturing a village, players will need to lead a force to help liberate the town and free the villagers. All of this content is derived from a single initial event--the dredge army marching through the map.
Johanson also explains that Guild Wars 2's dynamic events system addresses the problem of 'camping' bosses and quests in MMORPGs, crediting anyone who takes part in the event and scaling the difficulty depending on the number of participants.