I watched Naruto till the point maybe two years ago (or a year, I don't remember). The last things I saw were a defeat of Obito and the start of a fight with Madara.
Orochimaru was alive then. He was also on the side of good (as it seemed). So how did he die this time?
Orochimaru has technically never died. During the time being referenced he had been 'sealed' by Itachi.
This is a two part answer so here we go.
1.) This guy credited for this glorious explanation, because I couldn't have said it any better
Alright, I'll try to explain this is the easiest way possible, because it can be very confusing. First lets start out with the Orochimaru's Curse Mark, also know as Orochimaru's Juinjutsu, Orochimaru injects the victim with a mixture of Jugo's Transformation Enzyme, Orochimaru's Senjutsu Chakra, and some of Orochimaru's own consciousness. With his own consciousness in the victim, Orochimaru can remotely control the Curse Mark and the user to a limited extent. This is shown by Orochimaru's will manipulating Sasuke's own will during Sasuke's use of his respective Curse Mark. Now for your question. Orochimaru's body can be completely destroyed or sealed and he still can't be considered completely dead. As long as at least one Curse Mark remains, Orochimaru's consciousness still exists inside a person, i.e. Anko, and he is aware of all activities happening around him. The catch is Orochimaru can't influence these events in any way, as he has no physical form. However, if some one, i.e. Sasuke, uses the Evil Releasing Method, on a victim of the Curse Mark, the Curse Mark will be released and the mixture of previously stated objects will be released. So if for some reason, there was some of Orochimaru's DNA lying around, Orochimaru's consciousness would use the Senjutsu Chakra and Jugo's Enzyme to restore himself to a physical state. In conclusion, Orochimaru can be brought back multiple times, implying a specific set of requirements are met, since they were, Orochimaru has been brought back to life. But he can't exist twice since he has only one soul. He seemingly escaped the sealing of Itachi's Totsuka Blade, by using the these pieces of his consciousness.
2.) This Site gives a episode description of Orochimaru getting 'sealed' in the 'Fated Battle Between Brothers' episode. Particularly important is the last sentence.
During the battle with Itachi, Sasuke ran low on chakra and Orochimaru was able to emerge from his cursed seal using his signature Eight Branches Technique. He marvelled at the fact that he would finally have the chance to take Sasuke's body, but was immediately pierced through by the blade held by Itachi's Susanoo. At first Orochimaru boasted that it would take more than that to kill him, but he soon realised that he had been pierced by the Totsuka Sword that he himself had been searching for. Orochimaru was then sealed away by Itachi's Susanoo, which had the effect of removing Sasuke's cursed seal in the process. Three white snakes escaped from Orochimaru's body as he was sealed, but at least one of these snakes was subsequently killed by the black flames of Amaterasu.
