I'm glad to have read it although I didn't exactly enjoy it.
Shevek, a physicist from Annares who is developing the theory that will lead to the ansible (which made me feel I was witnessing history being made, because of the ansible's importance to science fiction ever since this book came out in the 70s), goes to Urras where interaction with other physicists and students will enable him to complete his work. Annares and Urras are twin planets that orbit each other; Urras is earth-like and full of life, while Annares is dry desert barely capable of sustaining humans if they work nonstop. 160 years ago, followers of a revolutionary Urran philosopher - a woman named Odo - settled on Annares and closed the door behind them. A few times a year a supply ship visits for an exchange of resources, Annares' contribution coming from its mines.
The story is a mechanism for exploring the opposing social and economic systems on Annares and Urras. Annares is intentionally anarchist, Urras has a strong state supporting a capitalist system in the country Shevek visits (there's also another strong state on the planet, analogous to the US/USSR world order that seemed like a permanent feature of our world at the time this was written). The story is told in alternating chapters: Shevek's visit to Urras in present time, and his life on Annares from childhood to the decision to leave.
Annares has its own invented language, eschews property including the idea of "my" family (babies are even named by a computer), and has no money or official government. Individuals are meant to be free and make their own choices of what to do, what to produce, what to use, and where to live, although they're expected to pitch in and rotate through the unpleasant jobs, with the rotations coordinated by a computerized labor bureau. Children don't live with their parents but in communal creches. Adults live in dormitories, although they can use private rooms for sex. Women and men have equal status and responsibilities to the community. There are no prisons.
Urras is decadent capitalism at its worst. Women are glittery toys who tell themselves they control the world by controlling their men. The people Shevek meets officially live in luxury, while the masses live in miserable poverty and when they seem likely to protest are sent out to be distracted and killed in a war with the planet's other state. Shevek soon figures out that state wants him for the power it can get from his finished work.
Although the Urras sections get as much page-space as Annares, Urras itself isn't the subject: it's here to provide the contrast with Annares, show what Annares settlers were rebelling against, give a reason the people on Annares accept the hardships of their lives, and give us readers the chance to see how Shevek explains Annares to outsiders. The question explored through everything that happens in the book is whether people can deliberately create a better way to live through a systematic, intentional, philosophically driven anarchist community.
Le Guin subtitles the book "An Ambiguous Utopia" and that's exactly what she shows on Annares. Instead of government, there's social pressure to do the right thing, and shunning and even beatings for bad behavior. There's a mysterious clinic where people go if they don't fit in; this is supposedly voluntary but it's clear that people can be sent there against their will. There are people who have power and influence, like Sabul who sabotages Shevek's position as a researcher and teacher, suppresses the important part of his work which is a new way of thinking about time, and takes credit for the acceptable part of Shevek's work. Bureaucracy is growing in response to temporary needs, like the need to assign everyone to certain kinds of work when the planet has a particularly dry period, and not disappearing when the temporary need is over.
This is what makes the book less than fun to read. It's brilliant, and it's all too real. At the time it was written, lots of people were thinking about better ways to live, and some were experimenting with retreating to bucolic communes while others were active in movements that tried to change society. Heinlein's Stranger in a Strange Land had come out a few years back, with Valentine Michael Smith giving the outsider's view of our culture in contrast to what sounded legitimately utopian on Mars (if I remember it correctly, which I might not; I haven't read it since the 70s). There's a page in the last Whole Earth Catalog from about the same time The Dispossessed was written, with a picture of a doll in a birdcage, with a sign saying "I did not wash my dish." The caption is "Discipline on the Hog Farm." Reading The Dispossessed in 2019, when it's clear that racist and sexist attitudes the movements tried to wipe out fifty years ago are still as strong as ever, was depressing because of the way it articulated and highlighted the fundamental problem that makes any effort to make the world a better place seem to be a Sisyphean task. That rock is rolling back down, no matter how hard we push.
Bottom line, I guess, is that you're always going to have human nature to deal with.
For a better take on the book, including a bit about its Taoist motifs like the idea that apparently opposing forces are part of a unifying whole, and each thing carries inside it the seed of its opposite, see https://io9.gizmodo.com/ursula-le-gui...from i09.