You need to define zones
:
--auth-zone=[,[/][,[/].....]]
Define a DNS zone for which dnsmasq acts as authoritative server. Locally defined DNS records which are in the domain will be served. If subnet(s) are given, A and AAAA records must be in one of the specified subnets.
Also note that:
Dnsmasq is a DNS query forwarder: it it not capable of recursively answering arbitrary queries starting from the root servers but forwards such queries to a fully recursive upstream DNS server which is typically provided by an ISP. By default, dnsmasq reads /etc/resolv.conf to discover the IP addresses of the upstream nameservers it should use, since the information is typically stored there. Unless --no-poll is used, dnsmasq checks the modification time of /etc/resolv.conf (or equivalent if --resolv-file is used) and re-reads it if it changes.