Dyno measures torque and rpm, it measure by giving an engine a job, if you free rev your engine you make rpm but very little torque. A running engine alway produces power even in a free rev just not that much, a quarter mile run is max power and driving is everything in between power.
Think of it like electrical terms, you'd be watt's is a calculation and amps is all that matters and volts that probably does something but not too important.
