If you look at the replication of end of chromosomes, you will see that one of the strand gets shorter every time. To prevent the genes from being disrupted, the ends of the chromosomes have repetitive sequences called telomeres which shorten with every replication but will prevent the disruption of genes.
As you can deduce from the above information, there will be a certain limit to how many times a cell can divide.So, it has been thought that any organism ages because of shortening of telomeres.
Gametes have the enzyme telomerase which will lengthen the telomeres to full length so that the zygote formed will have unshortened telomeres. But, in the case of Dolly the nucleus was taken from a somatic cell and so the telomeres did not lengthen. The age of Dolly at the time of birth was thus the age of mother from which the nucleus was taken.
See : Telomere