It's the amount of acceleration (0-30,0-50,0-100,0-120mph) of a set mass over time. Those three factors is what determine your hp. From hp, they calculate probable torque at that rpm where you made that specific hp.
So for example, If you dyno in 2nd gear in a manual, your top speed is like 35mph or so.
So 15mph to 35mph. You can turn that set mass very fast to 35mph. Say that time is 2 seconds. However, you never make any boost since the run is over very fast. top out at 25psi of 50. you accelerated the mass 20mph faster in 2 seconds might translate to 400hp.
The next run is in 6th. 70mph to 110. you do the same run in 3 seconds. you are able to make 50psi on the run now due to the gearing that translates into more preload on the motor right.. Now you accelerate the same mass 40mph. your HP is now 600hp. you where able to accelerate it much "further" in just a little more time.. Therefore you need more hp to do that task.
thats why you dyno on a inhertia dyno in a higher gear, so you can get push that roller as fast and as far as you can.
Ever wonder why guys with 600hp trucks take for ever to spin the dynojet while the 1200hp trucks spool and shut down almost in the same instant?
Now the guy that just dynoed 1088 on BDP's load dyno, that was a near 10 second run, mainly because the dyno was holding back on the truck. In theory, the dyno could stall the truck at peek HP if the operated wanted to. I'm sure the tires would rip apart first, however, it's possible. With that dyno, the amount of current required to hold back the truck translates into hp with some magical pixie dust.