Dynamic Host Configuration Protocol (DHCP) allows a computer to join an IP-based network without having a pre-configured IP address. DHCP is a protocol that assigns unique IP addresses to devices, then releases and renews these addresses as devices leave and re-join the network.
Internet Service Providers (ISPs) usually use DHCP to allow customers to join the Internet with minimum effort. Likewise, home network equipment like broadband routers offers DHCP support for added convenience in joining home computers to the LAN.
DHCP environments require a DHCP server set up with the appropriate configuration parameters for the given network. Key DHCP parameters include the range or "pool" of available IP addresses, the correct subnet masks, plus gateway and name server addresses.
Devices running DHCP client software can then automatically retrieve these settings from DHCP servers as needed. Using DHCP on a network means system administrators do not need to configure these parameters individually for each client device. Also Known As: Dynamic Host Configuration Protocol
Pretend that you want to drive in your car to your friend's house, you say, "I'm going to Chris's house." You do *NOT* say, "I'm going to 2020 Jamestown Court, Anyville, USA." Right? Because it's difficult to remember all the addresses, we only remember the names. But, to compare your car to your computer, your car can't go anywhere unless it goes to the address.
Now, DHCP is the system used to give out IP addresses on a network. Let's say you take your laptop to Starbucks. Before you can get to yahoo.com, you have to first connect to the network. Part of the connecting process is getting an IP address for your laptop. DHCP is the system that assigns your laptop an IP address for the Starbucks network.
You can think of DHCP, to continue the car analogy, as like the system that gives your car a license plate number so you can be on the roads and go to John's house.