I notice my upper eyelids have dead dirt like skin. When I rub it more dry skin appear, it gets more itchy. Why is this? How to treat it? Elaborate.

Not dead skin. It is not dead skin but dried up oils and a condition called "blepharitis". The oils come from gland on your eyelids. Treat it by soaking your eyelids with warm washcloth for about 5 minutes. Then wash your eyelids with a special eyelid wash to remove the oils. If it doesn't improve you should see an eye care professional.