Dictionaries are used to map a list of values to another list of values, arranged as key/value pairs. Both the keys and values can be an object or a string of text; key entries can also be defined as a regular expression.
Dictionaries are used in Pipe robots to normalise data - say you need to map certain typo's to their actual counterpart - or you want to lookup a certain SKU in a dictionary to get the proper name for a product. This can all be done using the dictionaries.
To create a new dictionary head to your Projects view - and click the top-right "New" button. Here you can choose "Dictionary".