I'm sure someone else can give a more thorough explanation but I will quote below a passage from Rupert Gethin's The Buddhist Path to Awakening (p. 148) that succinctly paraphrases Conze on this issue:

The scholarly literature on the notion of dhamma/dharma in Buddhist thought is, not surprisingly, fairly extensive. Perhaps one of the best succinct yet still sufficiently comprehensive accounts is found in Edward Conze's Buddhist Thought in India. The Buddhist usage of the word 'dharma', Conze notes, is 'ambiguous and multivalent'. He goes on to distinguish seven 'philosophically important' meanings which may be summarized as: (i) (a) transcendent reality (nirvāṇa), (b) 'order of law of the universe', (c) a truly real event ('things as seen when Dharma is taken as norm'), (d) mental percepts (dharmāyatana), (e) characteristic or property (e.g. vaya-dharma); (ii) moral law, right behaviour; (iii) the texts of the Buddhist tradition (i.e. the preceding as interpreted in the Buddha's teaching). In conclusion Conze comments: 

Frequently it is not at all easy to determine which one of these various meanings is intended in a given case ... This applies to such terms as 'Dharma-body', 'Dharma-eye', the 'analytical knowledge of Dharma', the 'investigation (pravicaya) into dharma(s)' ... And once the Mahāyāna had identified the casually interrelated dharmas with the one and only Dharma, the very distinction between 'dharma' and 'dharmas' had to be abandoned. 

Conze, then, identifies various nuances of the word dharma and also suggests that the different nuances are by no means mutually exclusive. Conze finally points out that any difference in interpretation between the schools is 'more one of emphasis than of opinion'. Indeed, it seems to me that the identification of 'causally interrelated dharmas with the one and only Dharma' must be considered virtually complete already in the Nikāyas. 

Best wishes,

Charles