DHCP is an acronym for Dynamic Host Configuration Protocol.
At its most basic, DHCP is the communication protocol that allows a computer, when it is connected to a network, to broadcast a request for an IP address. The DHCP server – typically your home router – sees this request and responds with an assigned IP address.
The IP address assigned by DHCP is considered “dynamic” because it may change, based on how many other devices have requested IP addresses, and when.
Read more in the Ask Leo! article: What is DHCP?