We know that the self; who "I" am, is not just one thing. We know that because we have had the experience of talking ourselves through something (what else do I need to pack? ah yes! a swimsuit...etc.), replaying a conversation in our head or having a song stuck there, much to our own chagrin. Some nights we dream- those dreams/thoughts seem to come from a different place in our minds, they fill our heads with pictures while we are asleep. Other times we might hear ourselves saying things we didn't really think we would say: that can be embarrassing, or even confusing. This is not dissociation, but rather different experiences of multiplicity, what I like to call "not me experiences". As we mature, we learn to translate these "not me experiences" into a new language in which they form links to other types of experiences so the multiple ways in which we experience the world are consistently connected and it is this consistency that we call "me". 
We can think of multiplicity of thinking ("me experiences") as something that works like the internet: open standards allow every network to connect to every other network, it’s a network of networks that operates around the world as if it were one. No one is in charge of it, yet everyone is. When we let ourselves play with our own thoughts: when we daydream in the shower, while gardening or playing the piano, we are actually using the world around us as a container for our thoughts as they connect in new ways. I find this to be a good way of explaining why so often the best ideas come in those of situations. 
In contrast, dissociation is more like an old telephone system where an operator used a switchboard to connect calls. This process was not only slower, but also subject to interruptions and delays.

Dissociation happens when a consistent sense of self is not achieved or is broken repeatedly. This can happen when a baby is born with a weak ability to make use of it's environment for some constitutional reason. It can happen when an environment is not "good enough" for a particular baby: when a parent who is supposed to protect is too scared herself and looks to her child for protection. It happens when a care giver is also an abuser, when there is a lot of chaos in the environment and no explanation is offered. 
Dissociation can be seen as a defense against these types of environments: it protects some parts of the "me" and allow them to develop further rather than having the whole personality shut down. Dissociation can be thought of as a radical tool allows creative children to continue learning and developing in difficult environments by "casting away" unthinkable thoughts and feelings. Other people living in such harsh environments would not able to learn: they would shut down or act out. 
Dissociation can also be seen as an insufficient way for the brain to develop. Just as a malnourished boy may not reach his full height as an adult, so a person whose neuro- networks haven't had a chance to develop fully might not be able fully to be engaged with people or make use of his own thoughts and feelings in an adaptive way.