The word still has some regional usage as a replacement for the word generator. In the UK, a small electrical generator built into the hub of a bicycle wheel to power lights is called a Hub dynamo.
The dynamo uses rotating coils of wire and magnetic fields to convert mechanical rotation into a pulsing direct electric current through Faraday's law. A dynamo machine consists of a stationary structure, called the stator, which provides a constant magnetic field, and a set of rotating windings called the armature which turn within that field. On small machines the constant magnetic field may be provided by one or more permanent magnets; larger machines have the constant magnetic field provided by one or more electromagnets, which are usually called field coils.
The commutator was needed to produce direct current. When a loop of wire rotates in a magnetic field, the potential induced in it reverses with each half turn, generating an alternating current. However, in the early days of electric experimentation, alternating current generally had no known use. The few uses for electricity, such as electroplating, used direct current provided by messy liquid batteries. Dynamos were invented as a replacement for batteries. The commutator is a set of contacts mounted on the machine's shaft, which reverses the connection of the windings to the external circuit when the potential reverses, so instead of alternating current, a pulsing direct current is produced.
The first direct current generator was invented by Michael Faraday in 1831, a copper disk that rotated between the poles of a magnet. However, the single current path in Faraday's disk generated very low voltage. Faraday and others found that higher, more useful voltages could be produced by winding multiple turns of wire into a coil. As dynamos began to be used in industry, it was found to be more economical to transport electricity at higher voltages. Since power is equal to the voltage times the current, higher voltages required less current, allowing the use of narrower, less expensive conductors. Wire windings can conveniently produce any voltage desired by changing the number of turns, so they have been used in all dynamos.
The first dynamo based on Faraday's principles was built in 1832 by Hippolyte Pixii, a French instrument maker. It used a permanent magnet which was rotated by a crank. The spinning magnet was positioned so that its north and south poles passed by a piece of iron wrapped with wire. Pixii found that the spinning magnet produced a pulse of current in the wire each time a pole passed the coil. However, the north and south poles of the magnet induced currents in opposite directions. To convert the alternating current to DC, Pixii invented a commutator, a split metal cylinder on the shaft, with two springy metal contacts that pressed against it.
In 1827, Hungarian Anyos Jedlik started experimenting with electromagnetic rotating devices which he called electromagnetic self-rotors. In the prototype of the single-pole electric starter (finished between 1852 and 1854) both the stationary and the revolving parts were electromagnetic. He formulated the concept of the dynamo at least 6 years before Siemens and Wheatstone. In essence the concept is that instead of permanent magnets, two electromagnets opposite to each other induce the magnetic field around the rotor.
Both of these designs suffered from a similar problem: the electric current they produced consisted of "spikes" of current followed by none at all. Antonio Pacinotti, an Italian scientist, solved this problem around 1860 by replacing the spinning two-pole axial coil with a multi-pole toroidal one, which he created by wrapping an iron ring with a continuous winding, connected to the commutator at many equally spaced points around the ring; the commutator being divided into many segments. This meant that some part of the coil was continually passing by the magnets, smoothing out the current.
Zénobe Gramme reinvented this design in 1871 when designing the first commercial power plants, which operated in Paris in the 1870s. Another advantage of Gramme's design was a better path for the magnetic flux, by filling the space occupied by the magnetic field with heavy iron cores and minimizing the air gaps between the stationary and rotating parts. The Gramme dynamo was the first machine to generate commercial quantities of power for industry. Further improvements were made on the Gramme ring, but the basic concept of a spinning endless loop of wire remains at the heart of all modern dynamos.
While not originally designed for the purpose, it was discovered that a dynamo can act as an electric motor when supplied with direct current from a battery or another dynamo. At an industrial exhibition in Vienna in 1873, Gramme noticed that the shaft of his dynamo began to spin when its terminals were accidently connected to another dynamo producing electricity. Although this wasn't the first demonstration of an electric motor, it was the first practical one. It was found that the same design features which make a dynamo efficient also make a motor efficient. The efficient Gramme design, with small magnetic air gaps and many coils of wire attached to a many-segmented commutator, also became the basis for the design of all practical DC motors.
Large dynamos producing direct current were problematic in situations where two or more dynamos are working together and one has an engine running at a lower power than the other. The dynamo with the stronger engine will tend to drive the weaker as if it were a motor, against the rotation of the weaker engine. Such reverse-driving could feed back into the driving engine of a dynamo and cause a dangerous out of control reverse-spinning condition in the lower-power dynamo. It was eventually determined that when several dynamos all feed the same power source all the dynamos must be locked into synchrony using a jackshaft interconnecting all engines and rotors to counter these imbalances.
After the discovery of the AC Generator and that alternating current can in fact be useful for something, the word dynamo became associated exclusively with the commutated DC electric generator, while an AC electrical generator using either slip rings or rotor magnets would become known as an alternator.
An AC electric motor using either slip rings or rotor magnets was referred to as a synchronous motor, and a commutated DC electric motor could be called either an electric motor though with the understanding that it could in priciple operate as a generator.
After dynamos were found to allow easy conversion back and forth between mechanical or electrical power, the new discovery was used to develop complex multi-field single-rotor devices with two or more commutators. These were known as a rotary converters. These devices were usually not burdened by mechanical loads, but watched just spinning on their own.
The rotary converter can directly convert, internally, any power source into any other. This includes direct current (DC) into alternating current (AC), 25 cycle AC into 60 cycle AC, or many different output currents at the same time. The size and mass of these was very large so that the rotor would act as a flywheel to help smooth out any sudden surges or dropouts.
The technology of rotary converters ruled until the development of vacuum tubes allowed for electronic oscillators. This eliminated the need for physically spinning rotors and commutators.
Dynamos still have some uses in low power applications, particularly where low voltage DC is required, since an alternator with a semiconductor rectifier can be inefficient in these applications. Hand cranked dynamos are used in clockwork radios, lamps (LEDs), mobile phones (i.e. using USB port) and other human powered equipment to recharge batteries.