Gravitational time dilation is a real enough phenomenon, one that we can easily measure on Earth. The latest experiments can detect a height difference as little as a foot.
http://www.physorg.com/news204470740.html
Philosophically, though, the thing to realize is that it's coordinate dependent. "Time dilation" can be thought of as the relation between coordinate time which is the abstract time used to label a map of space-time, and proper time, which is what clocks actually measure.
Pre-relativity, one tends to blur the two concepts together. Post relativity, it becomes important to separate them - it's part of the process of getting away from the "universal now" or "universal time" of pre-relativistic physics.
This is all terribly abstract, so a concrete example might help. To label coordinates on the earth, we use lattitude and longitude (among other possible systems). This is a purely spatial example of a curved surface, so our example will only have space, and distance, and not time.
The Earth's surface is curved, so one degree of longitude is not a constant distance. Why don't we make a coordinate system that has a constant relation between coordinates and distances everywhere? Because it's impossible - you can't do that on a curved surface.
So, we wind up with coordinates on our map that aren't evenly spaced. And we introduce something called a metric, which allows us to relate coordinate changes to physical distances.
What's going on in relativity isn't that much different. You have coordinate systems (usually there's the possibility of more than one, which makes things more confusing), and the relation between the spacing of the time coordinates at some point, and actual elapsed times there, is given by the local value of time dilation _in that coordinate system_, which gives us one of the components of the more general space-time metric.