Dry skin results from lack of water in the outer layer of skin cells (stratum corneum). When this layer becomes dehydrated it loses its flexibility and becomes dry, cracked, scaly and sometimes itchy. The stratum corneum contains natural water holding substances, including urea, which retain the water seeping up from the deeper layers of the skin. Water is also normally retained in the stratum corneum by a surface film of sebum, which slow down the evaporation of water from the skin surface.  

The skin dries out when too much water evaporates from the surface. This increases with age, and is made worse by excessive washing because hot water and soap can remove the layer of natural oil on the skin surface.
Dry skin can be present in several dermatological conditions including atopic dermatitis (eczema), ichtyosis and psoriasis.