"Dropped frames" means that your connection to the server isn't stable, or you can't keep up with your set bitrate. Because of this, the program was forced to drop some of the video frames in order to compensate. If you drop too many frames, you may be disconnected from the streaming server. You may also have connection problems such as random disconnections due to firewall / anti-virus / security software, routers, etc. Here are common solutions to this issue.
Try changing servers
If you think the issue is not with your connection speed, the first thing you should do when trying to diagnose a dropped frames/disconnection issue is to try other ingest servers to see if you can get a stable connection. Sometimes the server you are trying to stream to is having an off day or is overloaded when you are trying to stream. Switching another server will resolve many dropped frames/connection issues. Just because the server you have selected is the "closest" to you, or pings the best to you, does not mean it will give you the best connection. In fact, there have been times where Europeans have found US servers most reliable to stream though. So give a wide variety of servers a try, and make sure you try several servers, not just one or two before you give up.
Twitch Users: Use
this tool to find the server that you have the best bandwidth to, and the max bit rate you can stream to that server at.
Try lowering bitrate
The next thing to do is lower bitrate until the dropped frames stop. Network conditions aren't always the same from day to day, and what worked yesterday isn't guaranteed to work today. Sometimes there's just not much else you can do except lower bitrate to compensate for the poor connection at a given time.