This is from Wikipedia..
"Dysplastic hip anatomy
In a hip suffering from dysplasia, two things are commonly abnormal. First, the caput is not deeply and tightly held by the acetabulum. Instead of being a snug fit, it is a loose fit, or a partial fit. Secondly, the caput or acetabulum are not smooth and round, but are misshapen, causing abnormal wear and tear or friction within the joint as it moves.
The body reacts to this in several ways. First, the joint itself is continually repairing itself and laying down new cartilage. However cartilage repair is a relatively slow process (the most rapid bodily repairs are often in systems with a blood flow, which cartilage lacks).
So the joint may suffer degradation due to the abnormal wear and tear, or may not support the body weight as intended. The joint becomes inflamed and a cycle of cartilage damage, inflammation and pain commences. This is a self-fueling process, in that the more the joint becomes damaged, the less able it is to resist further damage. The inflammation causes further damage. The bones of the joint may also develop osteoarthritis, visible on an X-ray as small outcrops of bone, which further degrade the joint.
The underlying deformity of the joint may get worse over time, or may remain static. A dog may have good X-rays and yet be in pain, or may have very poor X-rays and apparently almost no problems. The hip condition is only one factor to determine the extent to which dysplasia is causing pain or affecting the quality of life. In mild to moderate dysplasia it is often the secondary effects of abnormal wear and tear or arthritis, rather than dysplasia itself, which is the direct causes of visible problems."