The cycloidal propeller for a Micro-Aerial Vehicle (MAV)-scale cyclogyro in hover was studied using a 2D Reynolds-averaged Navier-Stokes equations solver. The effects of the blade dynamic stall, parallel Blade Vortex Interaction (BVI), inflow variation and flow curvature were discussed, based on the results of numerical simulation. The results from the 2D Computational Fluid Dynamics simulation indicated that the blade of the cycloidal rotor is actually performing a pitching oscillation, if observed in a moving reference frame. The dynamic stall vortices shed from the upstream blade cause intense parallel BVI on the downstream blade. The interaction will induce upwash and downwash on the downstream blade. This changes the effective reduced frequency and actually delays the stall of the blade, which is beneficial to the thrust generation. There is also strong downwash in the rotor cage and it changes the inflow velocity experienced by the blade. The downwash and flow curvature can either be beneficial or harmful to the thrust generation. The combined effects of dynamic stall, parallel BVI, inflow variation and flow curvature cause large aerodynamic force peaks and ensure the cycloidal rotors work at very low rotation speeds with high thrust. This guarantees that the cycloidal rotors possess at least the same level of hover efficiency as screw propellers.