How do you explain the MOSFET power dissipation?

It will make more sense if you first study the construction of MOSFET. It has three terminals, Gate (G), Source (S), and Drain (D). G is insulated from the S and D. Between S and D is a variable resistor, whose resistance depends on the voltage applied across G and S. Since SD is basically a resistor, you have power dissipation when a voltage is applied across S and D. Power dissipation = Vds * Ids.