Settle on the position of unknown sensors node called as localization process which is a serious concern in underwater wireless sensor network(UWSN) as it engross for different applications. As the anchor-based technique is expensive as well as very diminutive life-time researchers propose for anchor-free localization algorithms specially by designing a path for an Autonomous Underwater Vehicle (AUV) to maximize the location of accuracy as well as to reduce energy consumption. Many path planning proposals degrade their performance when there exist obstacles in the pathway of AUV. Hence, in this article we proposed a dynamic anchor free AUV based (DAFA) algorithm which determine the obstacle dynamically and change its path in accordance and the observed location of sensors node with accuracy in minimization of error, maximize the nodes settled and with minimum energy consumption. The simulation of the proposed model outperforms better than available traditional algorithms.