Concentrated dispersions of highly charged rod-like colloids (fd-virus particles) in isotropic-nematic coexistence exhibit a dynamical state when subjected to low-frequency electric fields [Soft Matter, 2010, 6, 273]. This dynamical state consists of nematic domains which persistently melt and form on time scales typically of the order of seconds. The origin of the dynamical state has been attributed to a field-induced, cyclic dissociation and association of condensed ions [Soft Matter, 2014, 10, 1987, Soft Matter, 2015, 11, 2893]. The ionic strength increases on dissociation of condensed ions, rendering the nematic domains unstable, while the subsequent decrease of the ionic strength due to association of condensed ions leads to a recurrent stabilization of the nematic state. The role of dissociation/association of condensed ions in the phase/state behaviour of charged colloids in electric fields has not been addressed before. The electric field strength that is necessary to dissociate sufficient condensed ions to render a nematic domain unstable, depends critically on the ambient ionic strength of the dispersion without the external field, as well as the rod-concentration. The aim of this paper is to compare experimental results for the location of transition lines and the dynamics of melting and forming of nematic domains at various ionic strengths and rod-concentrations with the ion-dissociation/association model. Phase/state diagrams in the field-amplitude versus frequency plane at two different ambient ionic strengths and various rod-concentrations are presented, and compared to the theory. The time scale on which melting and forming of the nematic domains occurs diverges on approach of the transition line where the dynamical state appears. The corresponding critical exponents have been measured by means of image time-correlation spectroscopy [Eur. Phys. J. E, 2009, 30, 333], and are compared to the theoretical values predicted by the ion-dissociation/association model.