Spin-orbit entangled magnetic dipoles, often referred to as pseudospins, provide a new avenue to explore novel magnetism inconceivable in the weak spin-orbit coupling limit, but the nature of their low-energy interactions remains to be understood. We present a comprehensive study of the static magnetism and low-energy pseudospin dynamics in the archetypal spin-orbit Mott insulator Sr2IrO4. We find that in order to understand even basic magnetization measurements, a formerly overlooked in-plane anisotropy is fundamental. In addition to magnetometry, we use neutron diffraction, inelastic neutron scattering and resonant elastic and inelastic x-ray scattering to identify and quantify the interactions that determine the global symmetry of the system and govern the linear responses of pseudospins to external magnetic felds and their low-energy dynamics. We find that a pseudospin-only Hamiltonian is insufficient for an accurate description of the magnetism in Sr2IrO4 and that pseudospin-lattice coupling is essential. This finding should be generally applicable to other pseudospin systems with sizable orbital moments sensitive to anisotropic crystalline environments.