Dynamic Host Configuration Protocol (DHCP) is a network management protocol used to automate the process of configuring devices on IP networks. It allows devices to receive their IP addresses and other related network configuration information automatically, reducing the need for manual setup. When a device connects to a network, it sends a request to a DHCP server, which then assigns an available IP address from a predefined range. This process simplifies network management and ensures that devices can communicate effectively without conflicts in IP addressing.