Yes, it's possible. It's a very large subject to cover in a single answer though, however you can:

• Instantiate objects or characters at any position (also read abobut Prefabs).
• Send and recieve information to and from WWW servers
• Create meshes, materials and shaders on-the-fly
• Sculpt, Texture and add foliage to terrain procedurally (although this is undocumented)

Check out all those links above for answers which go into further detail on the subjects. Like I said, it's a big topic :)

Well... if by dynamic you meen randomly generated each time the scene is loaded/the player enters an area, hten yes it's possible. ou should just set the transform position values to random numbers, for an instance:

function Start() { transform.position=Vector3(Random.Range(-10,10),Random.Range(-10,10),Random.Range(-10,10)); }

Keep in mind though, that Random.Range(-10,10) probably shouldn't use -10 and 10 as numbers. Instead of -10, put the lowest number, in which you want the character/building whatever, to be able to be placed, and instead of 10 you should put the highest. If you are not very experienced in random numbers, just use the use-some-numbers-and-try-to-see-if-they-work-and-if-not-adjust-them-method, it usually works pretty fine.

Oh, i thought you meant placing cities and characters randomly in the area, nvm this anwser ^^

With Instantiate() you can spawn a mesh or prefab you need in any location you want.

You'll probably need to use a tileable mesh for that, and maybe some mesh combiners.

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