In the absence of large-scale coherent structures, a widely used statistical theory of two-dimensional turbulence developed by Kraichnan, Leith, and Batchelor (KLB) predicts a power-law scaling for the energy, $E(k)\propto k^\alpha$ with an integral exponent $\alpha ={-3}$ , in the inertial range associated with the direct cascade. A power-law scaling is also observed in the presence of coherent structures, but the scaling exponent becomes fractal and often differs substantially from the value predicted by the KLB theory. Here we present a dynamical theory that sheds new light on the relationship between the spatial and temporal structure of the large-scale flow and the scaling of small-scale structures representing filamentary vorticity. Specifically, we find hyperbolic regions of the large-scale flow to play a key role in the flux of enstrophy between scales. Small-scale vorticity in these regions can be described by dynamically self-similar solutions of the Euler equation, which explains the power-law scaling. Furthermore, we find that correlations between different hyperbolic regions are responsible for the emergence of fractal scaling exponents.