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For more on marking an answer as the "Best Answer", please visit our FAQ.Alcohol is made by the fermentation of sugar by yeasts. If you take a bunch of grape and put them in a container they'll start to ferment. The juice inside the grape is rich in sugar, the dust on the skins of the grape contains wild yeasts, the yeast eat the sugar and multiply, producing alcohol in the process and reducing the sugar. When all the sugar has gone the yeast has nothing left to eat and dies. Now you have a bone dry wine. If there is a great amount of sugar the alcohol level goes up and up and up, but yeast cannot live in too high an amount of alcohol, so once the alchol level reaches around 15-16% alcohol the yeasts die. But there is still sugar left so you have a sweet wine.
Winemakers can control when fermentation stops by various means and thus control how the wine comes out, dry or sweeter.
Few people like a wine without any sugar at all, so most wines labelled as 'dry' do have a small amount of sugar.
Because there is a lot of snobbery these days that dry wine is fashionable but most people like a sweeter wine, many popular wines blur the boundaries, calling a medium sweet wine 'dry' and a sweet wine 'medium dry'.
But intensely sweet wines are a revelation and wonderful to sip after dinner.
There is only one rule that matters where wine is concerned - Drink what you like!