Why does firewood need to be dried?
Firewood that has not been dried has moisture in it. When wood has moisture in it, the heat from your fire goes towards heating up that water and burning it off (or evaporating it) which makes your fire not burn quite as hot as it should. In addition to your fire producing less heat, your stove is producing condensates. These condensates are what can result in a chimney fire. And this is a very dangerous scenario.
So what can you do to avoid chimney fire causing condensates?
You can season your firewood. In most scenarios, to season/dry your firewood, you would cut and split it in the spring to small manageable pieces and allow it to air dry throughout the spring, summer, and early fall. (Until it is cold enough to need to fire up your wood stove again). Some people prefer to give their wood even longer to season, letting it air dry for up to 2 years. This length of time is preferable if the pieces of wood are large. The bigger your firewood, the longer it will take to dry out. This is why if you do not have 2 years to allow your wood to dry then you should split it into smaller pieces.
While your wood is seasoning, you will want to keep it out of the elements (snow and/or rain) and up on a dry base. If you have your wood in a shed or storage building to season, you will need to have it to where wind and air can pass through to help dry out the wood by wicking away the moisture.
How do I know if purchased firewood is seasoned?
If you are purchasing your firewood from someone, then one way to tell if it is seasoned is if there are cracks in the grain on the end of the pieces of firewood.