How to dynamically allocate memory space for a string and get that string from user?

Read one character at a time (using getc(stdin)) and grow the string (realloc) as you go.

Here's a function I wrote some time ago. Note it's intended only for text input.

char *getln()
{
    char *line = NULL, *tmp = NULL;
    size_t size = 0, index = 0;
    int ch = EOF;

    while (ch) {
        ch = getc(stdin);

        /* Check if we need to stop. */
        if (ch == EOF || ch == '\n')
            ch = 0;

        /* Check if we need to expand. */
        if (size <= index) {
            size += CHUNK;
            tmp = realloc(line, size);
            if (!tmp) {
                free(line);
                line = NULL;
                break;
            }
            line = tmp;
        }

        /* Actually store the thing. */
        line[index++] = ch;
    }

    return line;
}

You could have an array that starts out with 10 elements. Read input character by character. If it goes over, realloc another 5 more. Not the best, but then you can free the other space later.

If you ought to spare memory, read char by char and realloc each time. Performance will die, but you'll spare this 10 bytes.

Another good tradeoff is to read in a function (using a local variable) then copying. So the big buffer will be function scoped.