In the dim and distant past, I think I read that the process works when the water already present in the cells (intra-cellular?) heats enough to soften the lignin in the cell wall enclosing it, when the lignin cools down it keeps its new shape and the cellular water , ideally, remains in its cell. Therefore, the heat to allow this process (heating the cellular water) can come in any form, hot rocks (still used in ship-yards), toasting over a fire, or even microwave. The water between the cells (inter-celleular?) has relatively little to do with the process. However, any heating will dry out the timber, causing stress and damage if the timber dries out excessively. To avoid this, some sources recommend pre-soaking but others point out that swelling of the timber, if this is excessive, can also be damaging. I think that the reason steam is better than dry is because the drying happens after the bending process finishes, whereas dry heat stresses the timber while the bending happens. If you can spread out the stresses instead of hitting the timber with them all at the same time then it is less likely to fail??
Just to throw something else into the mix - I boil timber for moderate bends, and then add steam for more severe ones and I always keep the surface of the timber wet as long as I can when dry heating.....
ps, it really is a very long time since I read up on this and I don't mnd being corrected on any of the above comments