The concentration parameter is a key characteristic of a dark matter halo that conveniently connects the halos present-day structure with its assembly history. Using Dark Sky, a suite of cosmological $N$-body simulations, we investigate how halo concentration evolves with time and emerges from the mass assembly history. We also explore the origin of the scatter in the relation between concentration and assembly history. We show that the evolution of halo concentration has two primary modes: (1) smooth increase due to pseudo-evolution; and (2) intense responses to physical merger events. Merger events induce lasting and substantial changes in halo structures, and we observe a universal response in the concentration parameter. We argue that merger events are a major contributor to the uncertainty in halo concentration at fixed halo mass and formation time. In fact, even haloes that are typically classified as having quiescent formation histories experience multiple minor mergers. These minor mergers drive small deviations from pseudo-evolution, which cause fluctuations in the concentration parameters and result in effectively irreducible scatter in the relation between concentration and assembly history. Hence, caution should be taken when using present-day halo concentration parameter as a proxy for the halo assembly history, especially if the recent merger history is unknown.