Imagine, for an exaggerated example, that the dihedral was 90 degrees, so that when the plane is flying level, the wings are each at a 45 degree angle. If you bank to the right so that the right wing is now horizontal (45 degree bank right) you will have an unbalanced wing with the weight of the plane completely at the end. Gravity will pull down on the plane, until the force is balanced on the left side by the left wing generating some vertical lift.
That is part of what is going on, but far from everything. It doesn't explain why a plane with dihedral will roll with rudder input, while a plane with a flat wing will just yaw back and forth, and a plane with anhedral will roll opposite the rudder input. And this works even if the plane is inverted, climbing vertically or diving vertically.
It also doesn't explain why moving the CG rearwards will make the plane's roll response to rudder generally increase.
There is a LOT going on.
My favorate site for how things fly is here:
http://www.av8n.com/how/
It's aimed at private pilots, but almost all the info is the same for models, and it's very complete.
It's explination of how dihedral works is in in section 9.1. The short version is that if you look at the airflow as it's seen by the individual wing halves, the AOA of each side is slightly different when you have dihedral and an airflow that is not aligned directly with the fuse centerline. This means that no matter what direction the plane is flying, if the airflow is coming slightly from the side (because of rudder deflection or whatever), then lift will be increased on one side and decreased on the other, causing a roll.