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What does it mean? How would you define it ? Since combat makes up the majority of the action portion of an MMORPG, it is a very important, perhaps the most important part of gameplay. This subject has been discussed before and it means different things to different people. To some it means twitch based action, to others it means different styles of fighting. Whatever it is, it needs to be more than just push an attack button and wait to see the results.
To me, dynamic combat means not having to fight the same way each time. Nothing is more boring than going on automatic pilot when the war starts, whether its push a button or push many buttons. It should involve strategy. Everyone and everything should have stengths and weaknesses in combat. Your job as a gamer is to figure out what your opponents' strengths are so you can avoid them and what their weaknesses are so you can expoit them. At the same time you have to know your own strengths and weaknesses so you can factor those into your combat strategy.
I don't have much interest in twitch based combat, at least, not physical twitching. I'm more interested in mental twitching.