Dynamic Host Configuration Protocol (DHCP)

Dynamic Host Configuration Protocol (DHCP) is a protocol used by networked devices (clients) to obtain the parameters necessary for operation in an Internet Protocol network. This protocol reduces system administration workload, allowing devices to be added to the network with little or no manual configurations.

Applicability: Dynamic Host Configuration Protocol is a way to manage network parameter assignment from a single DHCP server, or a group of DHCP servers arranged in a fault-tolerant manner. Even in small networks, Dynamic Host Configuration Protocol is useful because it can make it easy to add new machines to the local network.
DHCP is also recommended even in the case of servers whose addresses rarely change, so that if a server needs to be readdressed changes can be made in as few places as possible.

DHCP can be used to directly assign addresses to servers and desktop machines and through a Point-to-Point Protocol (PPP) proxy, to dialup and broadband on-demand hosts, as well as for residential Network address translation (NAT) gateways and routers.

NAT: In computer networking, network address translation is a technique of transceiving network traffic through a router that involves re-writing the source and/or destination IP addresses and usually also the TCP/UDP port numbers of IP packets as they pass through. Checksums (both IP and TCP/UDP) must also be rewritten to take account of the changes.