Without a doubt, the LP or CD recording engineer. I have not read all the responses but dynamics are determined by the source material one is listening to. That said, on the component side, speakers and amplifier determine the systems ability to reproduce great dynamics. Keep in mind that any system regardless of price can actually produce the full dynamics of the recording as long as the loudest passages are at volume levels under the maximum spl for the system as a whole.
In other words, if I am playing a Telarc CD with difference of 50 db between its lowest and loudest passage, and I set my volume level to produce about 100db on its loudest passage(which is not very loud), when the orchestra crescendo's between that soft to loud passage most systems will accurately render this. Compression of dynamics starts to occur when you near the physical limitation of the drivers.
Where a great system comes into play is producing substantially louder passages, say at 110db or even 120db, without compressing the music. This limitation is driven by the efficency of the speaker, the size of the speaker, and the amps power. That's why a small speaker, like a totem dreamcatcher, with a 4.5" woofer is limiting. Its maximum spl might only be 102db (100db without compression) which puts the floor of some orchestral passages below the ambient room db level (due to a/c units, heating ducts etc).
Unfortunately for most audiophiles, many modern recordings are now compressing music and placing all instruments and vocals at loud levels due to the prolific use of personal music systems like ipods and automobile listening. This is to compensate for high background noise levels from road noise or public spaces.
