Dynamic Host Configuration Protocol (DHCP) is a network protocol for automatically assigning TCP/IP information to client machines. Each DHCP client connects to the centrally-located DHCP server which returns that client's network configuration including IP address, gateway, and DNS servers.
DHCP is useful for fast delivery of client network configuration. When configuring the client system, the administrator can choose DHCP and not have to enter an IP address, netmask, gateway, or DNS servers. The client retrieves this information from the DHCP server. DHCP is also useful if an administrator wants to change the IP addresses of a large number of systems. Instead of reconfiguring all the systems, he can just edit one DHCP configuration file on the server for the new set of IP addresses. If the DNS servers for an organization changes, the changes are made on the DHCP server, not on the DHCP clients. Once the network is restarted on the clients (or the clients are rebooted), the changes take effect.
Furthermore, if a laptop or any type of mobile computer is configured for DHCP, it can be moved from office to office without being reconfigured as long as each office has a DHCP server that allows it to connect to the network.