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It could be dandruff, which sometimes does affect the armpits or dry skin. Dandruff is due to the excessive shedding of dead skin cells from the scalp. As it is normal for skin cells to die and flake off, a small amount of flaking is normal and in fact quite common.
Malassezia(yeast) lives on the scalps of most healthy adults without causing problems. But sometimes it grows out of control, feeding on the oils secreted by your hair follicles and causing irritation that leads to increased cell turnover. The result is a large number of dead skin cells.
Seborrheic dermatitis affects not only your scalp but also other areas rich in oil glands, such as your eyebrows, the sides of your nose and the backs of your ears, your breastbone, your groin area, and sometimes your armpits.
Dandruff responds well to the use of medicated or anti-fungal (anti-yeast) shampoos, and there is a wide variety available from pharmacies.
You can wash your armpits daily with a solution of a shampoo that contains a medication, such as selenium sulfide, zinc pyrithione, or Nizoral AD.
ref:http://www.beauty-makeup-guide.com/hair-care/dandruf.htm