Dyslexia, also known as word blindness, is a disability that affects reading, writing and vocal communication in varying degrees. It can also have impacts on visual and aural awareness in general. It was first formally described in the 1880s.
Although the severity of the disorder varies substantially, it's currently estimated that around 10% of the (Western) population are affected to some extent.
Despite very extensive research efforts, the causes remain unclear.
The causes of dyslexia are not agreed upon, although the consensus of neuroscientists believe dyslexia is a phonological processing disorder and that dyslexics have reading difficulties because they are unable to see or hear a word, break it down to discrete sounds, and then associate each sound with letters that make up the word."
Source :Wikipedia
Other theories include the possibilities that working memory, and the visual system might in some way be deficient (when compared to 'normal' population.)
It's widely accepted that genetic factors also play a role - though the exact genetic mechanisms and the inheritance patterns are not known.
Furhter reading : Perspectives on dyslexia US NIH.