Time dilation is caused by one strange property of the universe: The universe has a maximum speed at which things inside of it can move. No object can move faster than this speed at all. Objects without mass [such as photons, the particle of light] move at this speed, but not faster—we say "the speed of light," but it'd probably be better to say "the maximum speed of the universe," because other things can also move at this speed, not just light.
Speed, we know, is $\text{length-per-time}$. That is, an object's speed can be quantified in units that measure how far it's gone over a certain period of time. (i.e. - $\text{miles per hour}$ or $\text{kilometers per second}$).
So, why does the existence of a maximum speed (let's call it $c$) cause time-dilation? Well, an object's speed is relative. If I'm standing still, and you're moving in a car that goes past me at $60$ m.p.h., then when I clock you with a speedometer, your car is moving at $60$ m.p.h. But, what if you're still driving at $60$ m.p.h., and I'm driving passed you in the opposite direction at $70$ m.p.h.? To me, your car would be moving at $130$ m.p.h. (even though you maintained the same amount of pressure on the gas pedal).
Well, ok. That still doesn't really explain why time dilation occurrs. But think of this: What happens if your driving at $(2/3)c$ (that is, two-thirds of the speed of light) and I'm driving passed you, in the opposite direction, also at $(2/3)c$ ? Then, when I clock you, you should be moving at $(4/3)c$ ... right?
But there's a maximum speed that anything can be moving in any frame of reference. So I can't clock you at $(4/3)c$, because that's faster than the maximum speed. Let's say I'm measuring your speed in $\dfrac{\text{kilometers}}{\text{second}}$. Since I can't measure your speed as $(4/3)c$, it must be that I measure your speed as less than $c$ (since $c$ is the maximum).
How does $\dfrac{\text{kilometers}}{\text{second}}$ suddenly get... smaller?
It gets smaller if the $\text{second}$ in the denominator increases (time dilation) or if the $\text{kilometers}$ in the numerator decreases (length-contraction). That is—in order for this scenario, where we're driving passed one another at $(2/3)c$ to work out while the universe has a maximum speed, your $\text{second}$ must be longer than mine. Thus, time dilation. It is caused by the fact that the universe has maximum speed at which anything can move, in any frame of reference.