Dry skin (1.5cm diam) appeared at the top of my areola following getting implants via armpit. & now has increased my areola size- what's happening?

May be due 2 stretch. Enlarged areolar are very common following breast augmentation via any approach particularly with larger implants. The same is true for dry skin but i would discuss with your surgeon to make sure this is not due to some other cause. In the meantime use a non-medicated moisturizer.
Post-surgical change. Enlarging your breasts will stretch and enlarge the areolas as well, but the dry skin is unrelated to the areola enlargement. "dry skin" may be temporarily due to the surgical prep soaps and solutions changing the normal bacteria and lubrication properties. If you are early post-op, this should settle on its own. If later, you may need a dermatologist visit if this spot persists.