She is wearing a dress.

Meaning: This means that a female person has a dress on her body as clothing.

Choice of Words: Wearing means having something on your body as clothing or decoration. Dress is a one-piece garment that covers the body from the shoulders to the knees or ankles. She refers to a female person. When you put them together, "She is wearing a dress" is a description of a female person having a dress on her body.