External Causes:
Weather: Dry skin is worse during the winter months compared to summer. As the temperature drops, the humidity decreases and the skin starts to dry up. Winter conditions, including the wind and lack of humidity are the major causes of dry skin and this is most common in the home environment. However, dry skin is not only limited to the cold weather; the same can occur in the hot arid desert. Any place where the area is hot and lacks humidity will result in dry skin.

Central heating and air conditioning: Excessive use of AC and central heating are also common causes of dry skin. It is important to have a certain amount of humidity set up in these devices to prevent the drying of the skin.

Hot baths and showers: Frequent showering with hot water washes away the skin oils and breaks down the skin layer. This often leads to dry skin. Most swimmers do complain of dry skin

Internal causes
There are many disorders of the body which can lead to dry skin. Some of the more common causes include:
Thyroid: When the thyroid gland is under active, hypothyroidism, the skin fails to secret the oil. The skin is typically dry in these individuals. Hair is also known to fall off, esp. around the eye brows. Dry skin is a common feature with hypothyroidism and is reversible when the condition is corrected with thyroid supplements.

Psoriasis: Psoriasis forms thick scaly patches on the skin due to a rapid turn over of the skin. The skin is extremely dry in these individuals and itching is common.

Alcohol: Alcohol drinking causes a loss of fluid from the body and leads to severe dryness of the skin

Caffeine: Caffeine like alcohol also acts like a diuretic and causes loss of fluids from the body.

Diuretics: These drugs are administered to individuals to decrease the amount of fluids in the body. Eventually, dehydration occurs and the skin becomes dry.