"Book" refers to more than just dialogue or even the sung recitative. The book writer is also responsible for the the story, structure and "plot" of a musical. He determines the overall narrative, the characters and the various themes and "through-lines" in a show. He constructs the "skeleton" -- the composer and lyricist provide the "flesh."
In this case, Kushner initially wrote "Caroline, or Change" as a play without music. He had a reading of it at the Public about four years ago (before Tesori or Pinkins were involved with the project) and he and Wolfe believed it might make for a good book for a musical or an opera libretto. The opera idea was pursued first (with, I believe Bobby McFerrin on board as composer), but that project fell through. Tesori was then approached and she turned them down (repeatedly, if I remember correctly). Once Wolfe and Kushner were able to convince her, Kushner and Tesori began to work together in earnest, musicalizing the play (cannibalizing certain scenes as written, as well as writing new ones). About three years ago, they had a workable draft, which was when Pinkins came on board, and several workshops (and 19 versions of "Lot's Wife") later, we have this musical.
This isn't an unusual way for a musical to be birthed (if I'm not mistaken, Arthur Laurents had finished the books for both "West Side Story" and "Gypsy" before a note of music had been written). Book writers deserve much more credit than they ever receive because so often, great songs in musicals are actually musicalizations of scenes first written by the book writer (and lyrics are, at times, word-for-word adaptations of lines taken directly from the book).
"What a story........ everything but the bloodhounds snappin' at her rear end." -- Birdie
[http://margochanning.broadwayworld.com/]
"The Devil Be Hittin' Me" -- Whitney
