If you look at the issue dynamic load balancing solves, you can figure out how it works. Electrical circuits have a maximum load and may overheat if too much power is applied.
Most contemporary houses feature circuit breakers that shut off the power if the circuits are overloaded. This is because overloaded circuits may create fires. Also, running multiple power-hungry appliances uses all the available power and will trip the breaker, causing a home power outage.
When the electricity goes out, it's inconvenient and uncomfortable, but you may try shutting off power-hungry equipment to restore it. In this situation, dynamic load balancing may monitor how much power is being used on your circuit and intelligently provide it to the appliances that need it most. This enables several appliances to function without overloading the circuit.