  We present the structural and dynamical studies of layered vanadium
pentaoxide (V2O5). The temperature dependent X-ray diffraction measurements
reveal highly anisotropic and anomalous thermal expansion from 12 K to 853 K.
The results do not show any evidence of structural phase transition or
decomposition of {\alpha}-V2O5, contrary to the previous transmission electron
microscopy (TEM) and electron energy loss spectroscopy (EELS) experiments. The
inelastic neutron scattering measurements performed up to 673 K corroborate the
result of our X-ray diffraction measurements. The analysis of the experimental
data is carried out using ab-initio lattice dynamics calculation. The important
role of van der-Waals dispersion and Hubbard interactions on the structure and
dynamics is revealed through the ab-initio calculations. The calculated
anisotropic thermal expansion behavior agrees well with temperature dependent
X- ray diffraction. The mechanism of anisotropic thermal expansion and
anisotropic linear compressibility is discussed in terms of calculated
anisotropy in Gr\"uneisen parameters and elastic coefficients. The calculated
Gibbs free energy in various phases of V2O5 is used to understand the high
pressure and temperature phase diagram of the compound. Softening of elastic
constant (C66) with pressure suggests a possibility of shear mechanism for
{\alpha} to \b{eta} phase transformation under pressure.
