DHCP

Definition: 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.
Reference -http://compnetworking.about.com/cs/protocolsdhcp/

DHCP is a key technology that broadband routers, Internet connection sharing software like Microsoft ICS, and corporate proxy servers all rely on.
Reference - http://compnetworking.about.com/b/2004/01/18/what-is-dhcp.htm

The Dynamic Host Configuration Protocol (DHCP) supports automatic address assignment and improved configuration management of IP networks.
Reference -http://compnetworking.about.com/cs/protocolsdhcp/