Recently Colin Johanson made the following post in a thread on the main forums. If this doesn't explain GW2. I don't know what will:
per Colin Johanson:
We’re trying something very unique and different with Gw2, and a lot of it plays back on the original ideas and concepts we had for the game all these years we’re trying to build towards and accomplish. It’s important to us to continue to try new things, looking at ways of evolving and innovating what a live game can be. In many cases, we’re learning right along with you guys how all of this is going to work for a live game, and constantly adjusting as we see the outcomes and find ways to innovate on what a true online world experience can be.
Living World is above all, the attempt to really give the sense the world is constantly changing and evolving. That there is events and content that change the world in the short term (like our current events) and events that can occur or change for the long term, which is what we’re slowly building towards in the future with Living World content.
Living world absolutely does not mean nothing but content that comes in and leaves again a few weeks later, and though so far that’s primarily what you’ve seen, it’s not all we will do in the future. The intent is living world provides us with a story and narrative experience, sort of like your favorite TV show, to constantly update and change the world and provide unique and exciting rewards on a regular basis.
We might have events that occur and came back again with a few modifications in the future. We may have events that occur and then find new homes permanently down the road. We may have bosses from a storyline that continue on forever as guild bounty hunts when a story completes. Living world also allows us the opportunity to upgrade and make parts of our existing game better permanently, a living world narrative could allow us to rebuild and change an existing zone or dungeon, or could destroy one entirely.
Our goal is to get to a point where on a regular basis, the world around you is not only changing in the short term through our normal event system, it’s changing and evolving permanently through our living world releases as well. What you’ve seen so far is primarily some tests and warmup stuff while we in the background organize the company to support this exciting future for our game, the future for living world is filled with endless possibilities.
Enjoy the ride!