Dynamic Host Configuration Protocol (DHCP) is a network protocol that enables a server to automatically assign an IP address to an individual computer's TCP/IP stack software. DHCP assigns a number dynamically from a defined range of numbers (i.e., a scope) configured for a given network.
Almost all wireless access points, many wired Ethernet routers, and computers running Internet Connection Sharing have built-in DHCP servers. While this makes configuration of a small network easier, it can cause problems when the DHCP servers are used in larger networks. For this reason, Indiana University prohibits individuals and departments from setting up local DHCP servers on the IU network; see what are the DHCP operational policies at IU? For more details go to the link