This review provides an overview on various phenomena, hypothesized causes, and modeling approaches that describe “dynamic nonequilibrium” (DNE) of water flow in soils. Dynamic nonequilibrium is characterized from observations on the macroscale by an apparent flow-rate dependence of hydraulic properties or by local nonequilibrium between water content and pressure head under monotonic imbibition or drainage histories, i.e., not affected by traditional hysteresis. The literature indicates that key processes causing DNE are pore-scale phenomena such as relaxation of air–water-interface distributions, limited air-phase permeability, dynamic contact angles, and time-dependent wettability changes. Furthermore, entrapment of water and pore water blockage, air-entry effects, and temperature effects might be involved. These processes act at different pressure head regions and on different time scales, which makes effective modeling of the combined phenomena challenging. On larger scales, heterogeneity of soil properties can contribute to DNE observations. We conclude that there is an urgent need for precision measurements that are designed to quantify dynamic effects.