Oxford English Dictionary
a. Ancient Greek Hist. A Greek choric hymn, originally in honour of Dionysus or Bacchus, vehement and wild in character; a Bacchanalian song.
c. A speech or writing in vehement or inflated style.
A dithyramb was a choral hymn sung by fifty men or boys, under the leadership of an exarchon, to honor Dionysus.
The dithyramb became a feature of Greek tragedy and is considered by Aristotle to be the origin of Greek tragedy, passing first through a satyric phase.
Herodotus says the first dithyramb was organized and named by one Arion of Corinth in the late 7th century B.C.
By the fifth century B.C. there were dithyramb competitions between tribes of Athens.
Rabinowitz says the competition involved 50 men and boys from each of the ten tribes, amounting to 1000 competitors.
Simonides, Pindar, and Bacchylides were important dithyrambic poets. Their content is not the same, so it is difficult to capture the essence of dithyrambic poetry.
adapted from http://www.greektheatre.gr/origins.html
Dithyramb is an hymn to the god Dionysus, a choric song accompanied by flute. The worship of Dionysus was characterized by many eastern elements and influences from Thrace. As the religion was descending South, some elements of mysticism and orphism are observed in it.
As part of the choric poetry Dithyramb had a chorus. The members of the chorus were disguised as animals (goats) and they were called Satyrs. The Satyrs were daemons of the woods and at first they had no relation to Dionysus. But as his religion was expanding in the South of Greece, they attached to him. It is most possible that this meeting of the northern Dionysian religion with the Arcadian Satyrs took place in Peloponnesus.
At the beginning, the worship of Dionysus must have been quite simple. According to Plutarch (Moralia, 257), dithyramb consisted of songs, with lyrics drawn from Dionysus's life and his adventures.
Some of them were sad, symbolizing the suffering of God (sung during Lenea, in January, when nature mourns) and others funny, symbolizing the joy of God (sung during the Great Dionysia, in March, with the revival of the nature).
His followers, formed a parade: a satyr holding an urn full of wine and some branches of a grapevine led, followed by a satyr carrying a goat, then by a satyr carrying figs, and at last a satyr holding a phallus. (All the above mentioned were symbols of Dionysus.) Behind them followed the people singing the dithyramb.
The parade ended in a circular threshing floor (precedent of the orchestra pit of a theater), where the goat was sacrificed (Even in the later centuries, in the middle of the orchestra area one could find an altar - "thymeli").
At the end of the 7th century BC, Arion from Methemna introduced in Corinth a more sophisticated form of dithyramb by separating one satyr from the chorus (consisted of 50 men). This leading satyr ("coryphaeus") was reciting stories related to Dionysus. The dialect was the Doric, since Arion acted in Corinth (a Doric city).
Across the centuries the poets were composing each year dithyrambs for the Dionysian worship. In Athens, in the middle of 6th century BC, Thespis had the inspiration to insert into dithyramb some verses in another meter, without melody, suitable for recitation and a leading actor to recite them. Thus the leading actor (the hypocrite) was replying to the chorus and the plot was continuing. (The word "hypocrite" derives from the verb "apocrinomai", which in Greek means "to reply". In other words the hypocrite, the leading actor, was someone who was replying to the chorus.) The verse written for recitation have been written in attic dialect.
In that way the lyric and epic elements came together with the dancing movements of the chorus and ancient drama got born in the form of tragedy (solemn dithyramb), comedy and satiric drama (scoptic dithyramb).