Here is how he introduces his approach in The Formation of the Historical World:
The human sciences form an epistemic nexus that strives to attain objectively engaged and objectively valid conceptual cognition of the interconnectedness of lived experiences in the human-historical-social world. The history of the human sciences shows a constant struggle with the difficulties encountered here. ... The investigation of the possibility of such objective conceptual cognition forms the foundation of the human sciences. In the following, I present some contributions to such a foundation. (23)
The human-historical world as it confronts us in the human sciences is not a copy, as it were, of a reality existing outside it. The cognitive process cannot produce such a copy. It is and remains bound to its means of intuiting, of understanding, and of conceptual thinking. Nor do the human sciences want to produce such a copy. Rather, they refer what happens and what has happened -- the unique, the contingent, the momentary -- to a system of value and meaning. As it progresses, conceptual cognition seeks to penetrate this system ever more deeply. It becomes ever more objective in its grasp, without ever being able to surpass its own essence, namely, it can experience what is only through re-feeling and re-construing, through connecting and separating, through abstract systems and a nexus of concepts. (23-24)
Such conceptual cognition of the processes themselves in which the human sciences develop is at the same time the condition for the understanding of their history. On that basis, one recognizes the relation of the particular human sciences to the coexistence and sequence of lived experiences upon which they are founded. (24)
And one last point becomes intelligible. The development of the human sciences must be accompanied by a logical-epistemological self-reflection, that is, by the philosophical consciousness of the way in which the intuitive-conceptual system of the human-socio-historical world is formed on the basis of the lived experience of what has happened. (24)These are dense, difficult paragraphs, and they are worth spending time on unravelling. What is Dilthey saying here? What is the philosophy of society, history, and cognition that he is expressing?
The first sentence defines two domains: the knowledge system of the human sciences and the dense reality of the social world. Through the knowledge systems of the human sciences we arrive at representations of the social-historical world. The social-historical world is characterized in terms of the inter-connected lived experience of human beings; this implies communication, interaction, and subjectivity as crucial features of social life. The knowledge systems of the human sciences are characterized as being "objective" and "conceptual". The objectivity in question has to do with the fact that there is a reality associated with social life that serves as the object of knowledge; the conceptuality has to do with the fact that it is necessary to arrive at categories in thought in terms of which to organize and represent that reality.
This interpretation of the first sentence sounds rather Lockean or Cartesian; knowledge represents the world. The first sentence of the second paragraph, however, unsettles that naive realism, because here Dilthey insists upon the distinctness of representation and reality. Our knowledge of the social world is not a "copy"; it is an abstract representation. This observation seems to be analogous to the obvious point that a verbal description of an apple is not similar to the apple; rather it is a syntactic construction that attributes characteristics to the features of the apple. The next several sentences in the second paragraph seem to change the subject slightly; Dilthey distinguishes between "copying or representing" and "interpreting and locating in terms of a meaning system." This point is understandable in terms of the hermeneutic method: discover the meaningful relationships among elements of the text (or ensemble of actions). The "re-feeling and re-construing" seems to be an expression of the method of verstehen: to reconstruct the meaning of an action by placing oneself as fully in the position of the actor as possible. And the final two sentences seem to suggest a refinement of knowledge through the discovery of finer detail in the interconnections among events and their connections to a system of meaning in the world of lived experience.
There seem to be three high-level features of this conception: first, that human reality is relational and meaningful; second, that the knowledge of human reality involves refined interpretation of actions and interactions in terms of the meanings attributed to them by the actors; and third, that the knowledge enterprise itself is a meaningful activity that requires critical self-reflection. And, finally, there is a respect in which Dilthey's method is empirical rather than idealist. The objectivity that he seeks in these paragraphs seems to have at least in part to do with the idea of evidence-driven discovery.