  Observations of the innermost parsec surrounding Sgr A$^*$ ---the
supermassive black hole in the center of our Galaxy--- have revealed a
diversity of structures whose existence and characteristics apparently defy the
fundamental principles of dynamics. In this article, we review the challenges
to the dynamics theories that have been brought forth in the past two decades
by the observations of the Galactic center (GC). We outline the theoretical
framework that has been developed to reconcile the discrepancies between the
theoretical predictions and the observational results. In particular, we
highlight the role of the recently discovered sub-parsec stellar disk in
determining the dynamics and resolving the inconsistencies. We also discuss the
implications for the recent activity of Sgr A$^*$.
