The displacement of the positive flow pump is controlled by its pilot hydraulic cylinder. The tracking performance of the pump displacement directly affects the energy saving of the hydraulic excavator through power matching. In this article, a nonlinear dynamic characteristic of the positive flow pump in its pilot hydraulic cylinder is studied to improve the mathematical model for controller design. The concept of relative water hammer is first proposed to describe the relative pressure wave acting on the hydraulic piston to illustrate the mechanism of the nonlinearity. Chaotic motion can be generated by the relative water hammer when the hydraulic piston is in a partial stroke. The mathematical model is derived and its critical parameters are analyzed. The simulation and experimental results verify the existence of the relative water hammer and the effect of each critical parameter on the pilot hydraulic cylinder and the positive flow pump.