Oh! Easy, the Dynasty was created by this forum (by our masterminds and geniuses!) that is multi-generational. It is more challenging in the sense that it requires a lot more to be done before you can move on.
The biggest difference in the Dynasty to the Legacy is the Legacy is almost always counted to 10 generations where you move on from generation to generation. The Dynasty is only 8 generations and the founder and all of the heirs following must be alive in the household via ambrosia (the food that renews a Sim's lifespan).
The rules (normally accepted) for a Legacy were created on the Sims 3 Forum by Pinstar, but they have not been updated. Our forum members keep the dynasty up to date with new expansions/stuff and adjust the rules accordingly.
... Audren! You beat me to it!