According to the eNotes Guide to Literary terms (linked below), dialect is
the language of a particular district, class, or group of persons. It encompasses the sounds, grammar, and diction employed by a specific people as distinguished from other persons either geographically or socially. Dialect, as a major technique of characterization, is the use by persons in a narrative of distinct varieties of language to indicate a person’s social or geographical status, and is used by authors to give an illusion of reality to fictional characters.
In short, dialect is the way people talk which differentiates them, as individuals or as groups, from others and places them in a recognizable place and time.
In the case of The Outsiders, by S.E. Hinton, the main characters all speak in the dialect of a 1960s white gang in Oklahoma. Just as today's gang culture has its own vocabulary and way of speaking, the Greasers and the Hoods in this novel have their own language and way of speaking.
In terms of vocabulary, words like heater, blade, rumble, fuzz, weed, boozed up, hoodlum, cancer stick, broad, and tuff are routinely used by the gang characters, and it distinguishes them from the non-gang characters in the novel. (It is interesting to note that these words are still recognizable and not particularly gang-related today.)
There is also a specific and recognizable kind of rhythm and cadence to the gang members' speaking which is easy to distinguish once you have read or heard it a bit. Note the following
"Man, this place is out of it. What do they do for kicks around here, play checkers?" Dally surveyed the scene without interest. "I ain't never been in the country before. Have you two?"
Johnny shook his head but I said, "Dad used to take us all huntin'. I've been in the country before. How'd you know about the church?"
"I got a cousin that lives around here somewheres. Tipped me off that it'd make a tuff hide-out in case of something. Hey, Ponyboy, I heard you was the best shot in the family."
This dialogue (from chapter six of the novel) demonstrates the use of contractions, improper verb usage, and slang which are typical of these characters. There is also a similar rhythm to each character's speaking, as well as a kind of humor, which is only distinguishable after a more prolonged reading.
S.E. Hinton said she was interested in creating characters from "the drive-in social jungle" of the 1960s gang world, and she does that as much through dialect as any other method of characterization. She is able to capture both the youth and slang of these characters.