Historical Background

Here's Bobby D, circa 1963 with his girlfriend at the time, Suze Rotolo, in the village.

Dylan was born in 1941 in Hibbing, Minnesota, a small coal mining town in the northern part of the state. He grew up in the aftermath of WWII, in the midst of the cold war style fear hiding behind all of the dark corners of middle America in the late 40s and 50s, in a close-knit Jewish community. He was involved in rock-and-roll bands throughout high school, and played piano with local act Bobby Vee during his high school years. At Minnesota State, he discovered folk music, sold his electric guitar, and traveled to New York City with 10 dollars in his pocket to meet his idol, Woody Guthrie.
He found Woody dying of Huntington's disease in an old folk's home in New Jersey.
Here's an interesting little spoken word poem Dylan did during his cute-young-genius-phase of musical development about this experience:

He began to play in the coffeeshops and hootenanies that were popular in Greenwich Villiage during the early 60s, moved into a place on W 4th st and began to be known around the scene as a gravelly voiced baby faced young cutie that played mostly old folk covers and never stopped talking about Woody Guthrie. He began to develop his own, signature style, which although heavily influenced by Guthrie in feeling, sound, and basic character neverthless caught the attention of NY times reviewer at the Gaslight Tavern on Macdougal st and got him a positive review in the paper. In 1961, he was signed by John Hammond to Columbia, and recorded his first album of 11 old folk songs and two original songs in 3 afternoons for $402, to a middling but slightly positive reception. In 1963, he released The Freewheelin' Bob Dylan an album comprised completely of original songs, except for one cover, and cemented his status as a modern folk songwriter and brought him massive fame. These songs were squarely in the tradition of American folk music, signifying broadly that they were centered around simple chords, simple sing-song melody lines, and complex lyrical ideas and themes that were the focus of most of the composition, at least where the early Dylan songwriter was concerned. He began releasing a few albums in the same vein, but began to tug at the constrains of the Guthrie folk tradition, and began writing compositions that incorporated the logical extensions of the stream-of-counsciousness lyrics he hinted at in Freewheelin' and the strange abstractions of the folk song structures he began to indulge in in his records afterwards. In 1964, he recorded a demo of the song Mr. Tambourine Man, which the mostly-covers west coast "folk-rock" band the Byrds did a version of in early '65 and made the song a number one hit. Dylan released his own, solo acoustic version of in April of that same year, and it was afterwards released on his seminal record Bringing it All Back Home.

source- Chronicles, Bob Dylan's autobiograhy, Wikipedia, and No Direction Home, the recent Dylan documentary made by Martin Scorcese.