Dry eye occurs when your eyes are inadequately lubricated, either because they don't produce enough tears or the tears they do produce have the wrong mix of ingredients. This leads to rapid tear evaporation from the surface of your eye.
There is a film of tears that coats the surface of the eyes, lubricating and protecting the cornea from infection, eliminating debris, providing comfort, and also creating a smooth coating that allows light to be properly focused into your eye, allowing you to see clearly.