New words are invented all the time and some even begin to make their way into popular usage.
Muggle is one of the words from our very own Harry Potter Universe to have made it's way into more wide-spread usage, going beyond the books and entering the mainstream. This led to the word being added to the Oxford English Dictionary in 2002 with the definition of: "a person who lacks a particular skill or skills, or who is regarded as inferior in some way".
It is not uncommon that invented words from books make it into the dictionary, but it of course requires the book to have invented words in the first place and it requires the book to be widely known enough that the word gains traction in the population at large - or at least within subsets of the population.
Similarly other words disappear over time and fall out of usage, either because the thing they describes becomes less relevant or another word for the same thing gains popularity and overtakes it, or a number of other things that makes the word less used.
So should these words be removed when they are no longer used? The new words are added when they gain popularity, but what about the words whose popularity dwindles to the point that the word is either extinct or near extinction? And what should it actually take for a word to be added to the dictionary? As it currently stands, the word would usually need to have been in widespread use for 10 years, but is that too long? Or too short? And how widespread should it be? Should words from fictional works be added at all? Or should more of them since they do appear in literature and someone might therefore find them in a book and need to look them up?