"Dwell" translates to the number of degrees of distributor cam rotation the points are closed (they "dwell" together). A dwell meter is actually nothing more than a voltmeter. When the points are open, the meter reads battery voltage, since the circuit is not complete, and there's no current flowing. The meter is reading an open circuit with full battery voltage applied to it. When the points are closed, the voltage is zero, because the points are grounding the coil winding, and the dwell meter is attached between the coil and the points. Since the points are operating several times a second, the meter needle reads an average of the open and closed-circuit voltage, depending on how long the points stay grounded.
Let's say the points are closed 2/3 of the time. 1/3 of 12 volts is 4 volts, or 33% of the battery voltage. As the points are adjusted closer together, they stay closed longer, thereby decreasing the voltage the meter sees. If the points are open all the time, the dwell would be 0%, resulting in a dwell reading of zero degrees. That's the "set" line which is adjusted with the ignition on, and the points open. As the points close, the voltage seen by the meter goes to zero, and the needle will go to the full dwell setting, 60 degrees in the case of a 6-cylinder engine. A normal dwell reading of 60% to 66% of the distributor rotation would result in a setting of 36 to 40 degrees. That's about the maximum a 6-cylinder engine can handle. Usually, the dwell is set slightly less, to give the condenser plenty of time to discharge. If the dwell is set too high, the condenser completes its discharge as the points close, resulting in arcing and metal transfer.
Jerry