When a camera looks from a dark room towards a sunny street (such as an entrance), a normal image either washes the street out and loses the detail in it, or leaves the room too dark. WDR balances both so details remain visible.
Specs often mention "True WDR 120 dB" — the higher the number, the better the camera handles contrasting light. "Digital WDR" is a less effective software version.
Example
A True WDR camera above a glass shop door shows the face of whoever walks in despite the bright street behind them.