There are many ways that English words develop. It is a very large subject in its own right. An etymological dictionary will help you to see how words become what they are. This is a link to one: Online Etymology Dictionary
In the case of "dinosaur", it is a word that was created in 1841, by Sir Richard Owen, who combined the Greek words deinos "terrible" + sauros "lizard" to describe the fossils that were being discovered and needed to be identified.
"Dinosaur" has become used to mean a person or institution not adapting to change, so liable to become extinct as the dinosaurs eventually did.
In the sentence you ask about, it is saying that the person is old-fashioned, prejudiced and unable to change.
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