The hypothalamus in the brain regulates the feeling of thirst - with age the thirst centre become less effective - the feeling of thirst, which is stimulated by the release of antidiuretic hormone from the anterior pituitary gland just underneath the hypothalamus is not as effective.
Therefore it may simply be a case of older people not feeling thirsty and therefore forgetting to take in water - the kidneys may also lose there ability to reabsorb water from the filtrate passing through the nephrons and more water may be lost in urine.
If an older person has Diabetes then this could also be a cause for dehydration, however this does not tie in with the theory that they do not feel thirsty, because diabetics do have a pronounced feeling of thirst constantly
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