Seamers Stuart Broad and Chris Woakes both miss out on selection for the 15-man squad, but Steven Finn is included despite his recent struggles with injury.
As expected England overlooked Kevin Pietersen, despite his excellent recent form in South Africa’s Ram Slam competition and Australia’s Big Bash League.
The Super 10 stage of the tournament starts on March 15, with England playing their Group One opener the following day against the West Indies.
Also in their group are Sri Lanka, South Africa and one qualifier from Zimbabwe, Afghanistan, Scotland and Hong Kong.
Left-arm spinner Dawson, 25, has scored seven first-class centuries, but it was his good form with the ball on the England Lions tour of the UAE that has seen him picked.
England coach Trevor Bayliss admitted that he does not know too much about the latest member of his squad.
“I haven’t actually seen him play a game. He came to a practice when we were out in the UAE, and he was there with the Lions,” Bayliss said.
But the Australian added: “I went to one or two of their (England Lions) practices and saw him in the nets.
“From a bowling point of view, he gets a bit on the ball, and he looks as though he’s got something about him personality-wise.
“He can bat as well, and he’s a good fielder apparently.”
Australian Bayliss said that he was considering keeping Finn on the current tour of South Africa, but decided to give him time to rest ahead of the tournamant in India.
Pietersen, who is currently in Dubai playing for the Quetta Gladiators in the inaugural Pakistan Super League, was named player of the series when England won their only major global trophy in the 2010 World Twenty20.
But Bayliss was quick to reiterate that a return for Pietersen is just not going to happen.
“He wasn’t even discussed in the selection meeting,” he said.
“Everyone is very happy with the young team we’ve got … we’ve played very well in Twenty20 cricket over the last six months.
“We just want to move forward with that young team.”
Chris Woakes has been a regular in recent sides for all formats of the game, but the bowling all-rounder misses out as England look to a three-man spin attack of Dawson, Moeen Ali and Adil Rashid to lead the way on the sub-continent.
Former Twenty20 captain Broad was recently recalled to the one-day international squad for the ongoing series in South Africa, but he is yet to play a match in that series and will not return to the international version of the shortest form of the game next month.
Sri Lankan batting legend Mahela Jayawardene and former England Twenty20 captain Paul Collingwood will take up coaching roles.
Full England squad for World Twenty20:
Eoin Morgan (capt), Alex Hales, Jason Roy, Joe Root, James Vince, Jos Buttler, Sam Billings, Ben Stokes, Moeen Ali, Liam Dawson, David Willey, Chris Jordan, Adil Rashid, Reece Topley and Steven Finn.