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If a word is not in the dictionary, does that mean it isn't a real word?

"'Tis obvious that we have admitted many [new words and phrases]: some of which we wanted, and therefore our Language is the richer for them: as it would be by importation of Bullion: others are rather Ornamental than Necessary; yet by their admission, the Language is become more courtly: and our thoughts are better drest."
— John Dryden, 'Defence of the Epilogue', appended to The Conquest of Granada, 1672

A Living, Changing Language

English is a living and distinctly vibrant language, spoken by millions around the world. Although many aspects of English remain constant from one place to the next, there is also a high degree of variety in the "flavors" of it spoken around the globe, with people from each region adding unique vocabulary, pronunciation, and idioms, forever expanding the boundaries of a remarkably pliant language.

"We lack a term; we feel the need of one. Choose a pleasant sound, with no trace of ambiguity about it, which adapts itself to our language, and which is an easy way of making our speech more concise. Each individual first of all sees an opportunity for it; four or five people risk using it unassumingly in informal conversation; others repeat it because of its taste of novelty; and there it is in fashion. In this way a footpath newly begun across a field soon becomes the most well-trodden, when the old road is found to be uneven and not so short."
— François Fénelon, 'Letter to the French Academy' (translation), 1714

A Growing Vocabulary

One of the most prolific areas of change and variation in English is vocabulary; new words are constantly being coined to name or describe new inventions or innovations, or to better identify aspects of our rapidly changing world. Constraints of time, money, and staff would make it impossible for any dictionary, no matter how large, to capture a fully comprehensive account of all the words in the language. And even if such a leviathan reference was somehow fashioned, the dictionary would be obsolete the instant it was published as speakers and writers continued generating new terms to meet their constantly changing needs.

An Impractical Dictionary

Such an exhaustive catalog of every English word would also prove extraordinarily cumbersome to use. Its physical extent would preclude the printing of a book or even volume of books that was not extremely unwieldy, and the number of esoteric entries and jargon unique to specific fields or small regions would generate so many results in electronic searches as to make it difficult to find commonly used or needed words (imagine, for instance the difficulties of locating a word in such a database if you were not entirely sure how to spell it – a problem that is often sufficiently challenging in much more modest-sized dictionaries).

A man coynes not a new word without some perill, and lesse fruit; for if it happen to be received, the praise is by moderate; if refus'd, the scorne is assur'd.
— Ben Jonson, Timber: or, Discoveries made upon Men and Matter, 1640 (published posthumously)

Passing Fancies

Many new words pass out of English as quickly as they entered it, the fad of teenagers grown to adulthood, the buzzwords of the business meetings past, the cast-off argot of technologies superceded, the catchy phrases from advertisements long forgotten. It is likely that many such ephemeral coinages will never be entered in dictionaries, especially abridged dictionaries where space (or time or money or all of the above) are at a premium. That does not mean, however, that the words did not exist, simply that they did not endure.

Dictionaries and reality

Most general English dictionaries are designed to include only those words that meet certain criteria of usage across wide areas and over extended periods of time (for more details about how words are chosen for dictionary entry, read "How does a word get into a Merriam-Webster dictionary?"). As a result, they may omit words that are still in the process of becoming established, those that are too highly specialized, or those that are so informal that they are rarely documented in professionally edited writing. The words left out are as real as those that gain entry; the former simply haven't met the criteria for dictionary entry – at least not yet (newer ones may ultimately gain admission to the dictionary's pages if they gain sufficient use).

However, in preparing your own writings, it is worth remembering that the dictionary encompasses the most widely used terms in English. Words that are left out may have usage limited to specific, isolated, or informal contexts, so they should be used carefully.

Then fear not, if 'tis needful, to produce
Some term unknown, or obsolete in use,
(As Pitt has furnish'd us a word or two
Which lexicographers declined to do;)
So you indeed, with care, – (but be content
To take this license rarely) – may invent.
New words find credit in these latter days,
If neatly grafted on a Gallic phrase.
— Lord Byron, Hints from Horace, 1811