Could be either. Itch can be due to an internal disease like cancer or hepatitis. But dry skin can also lead to itchy skin. I suggest seeing a doctor who can do a complete pruritus (itch) evaluation for you such as a dermatologist. In the mean time you can treat dry skin by a gentle skin care regimen: short lukewarm shower once a day with gentle soap (dove), pat dry skin and apply thick cream while skin is moist.