DHCP stands for Dynamic Host Configuration Protocol and is an auto configuration protocol used on IP networks and an extension of the Bootstrap Protocol.

The Dynamic Host Configuration Protocol (DHCP) is an auto configuration protocol used on IP networks and an extension of the Bootstrap Protocol. DHCP allows for computers to be configured automatically to communicate with each other over an IP network without the need for manual setup by a network administrator.

The implementation of DHCP relies on a DHCP server to hand out network configuration information to DHCP-capable clients that request an IP address (and other information required or useful in communicating with other devices on an IP network). In addition to an IP address, common configuration information served over DHCP includes a default gateway, subnet mask and DNS sever(s), though there are many more possible configurations that can be sent out using the DHCP protocol.

More in-depth detail on DHCP and its implementation can be found at Wikipedia.