how does dissertation work

Here’s another definition that underlines some more important characteristics of a dissertation: “a substantial paper that is typically based on original research and that gives evidence of the candidate’s mastery both of her own subject and of scholarly method.”
There are some obvious differences: an essay is relatively short – usually 1500 to 2500 words – and you are told clearly what to do by someone else. For example: Describe and evaluate major theories of globalisation.

The masters thesis and doctoral dissertation are written documents that describe the graduate student’s research. The subject of the thesis/dissertation is chosen by mutual agreement between the student and major adviser, and must be approved by the student’s Supervisory Committee. There is no fixed length for the thesis/dissertation, although the Supervisory Committee should provide guidance on format and content.
Masters theses should reveal a capacity to carry on independent study or research and should demonstrate the student’s ability to use the techniques employed in their field of investigation. Doctoral dissertations should demonstrate technical mastery of the student’s field and advance or modify current knowledge. Dissertations should treat new material, find new results, or draw new conclusions; or it should interpret old material in a new light. It is expected that the research contained in the thesis/dissertation will be worthy of publication in appropriate peer-reviewed journals. Students are expected to prepare the manuscript(s) for publication prior to, or soon after, completion of their graduate program.

Refences:

http://cehs.unl.edu/nhs/what-thesis-and-dissertation/
http://www.sussex.ac.uk/skillshub/?id=479&site=normal