Though you tend to think only about the inch or two of each grass shoot that you actually see, there's a whole root system working underneath it. Over time, some of those roots decay, causing thatch -- a layer of dead material.
If allowed to grow thicker than half an inch, thatch can choke a lawn of water and air and slowly strangle your lawn like some sort of invisible boa constrictor.
To counteract the problem, use a dethatching attachment on your mower or rent a thatching machine. Also, try raking a quarter inch of top-dressing soil over your lawn, which can accelerate the thatch's decay rate. But don't overdo it and try to eradicate all the thatch, since a thin layer actually protects the roots beneath it.