DHCP is a way used by computers and networks to assign addresses to computers and other devices to identify them on networks including the Internet.
If you were to go in Network Connection on your computer you would see you can either assign an IP address (numbers that look like 192.168.3.13) or you can have it get the address automatically. If you choose automatic, then the computer uses DHCP to ask a server (a bigger centralized computer) for an address to use. By using DHCP or automatically getting addresses it is easier to make sure addresses are not duplicated and correct addresses for that network are used.
DHCP is an acronym for Dynamic Host Configuration Protocol and is used to configure all the information needed to set a computer up on a network. Protocols are just sets of rules the machines use to transfer information and to communicate.
DHCP can be used to set up IP addressing using IP (Internet Protocol) v4 or v6. IPv6 addresses are starting to be used more and are usually expressed in hexadecimal as a 32 character address. Since it uses hexadecimal the addresses can contain numbers and the letters A through F. IPv4 addresses which we have used since before the World Wide Web was created in 1993 are 4 sets of decimal numbers separated by periods and each of the four numbers can range from 0 to 255.
Network administrators maintain the DHCP servers and set the rules on them on what addresses are issued and for how long.