Dynamic IP addresses are most frequently assigned on LANs and broadband networks by Dynamic Host Configuration Protocol (DHCP) servers. They are used because it avoids the administrative burden of assigning specific static addresses to each device on a network. It also allows many devices to share limited address space on a network if only some of them will be online at a particular time.
Some infrastructure situations have to use static addressing, such as when finding the Domain Name System host that will translate domain names to IP addresses. Static addresses are also convenient, but not absolutely necessary, to locate servers inside an enterprise.
Multiple client devices can appear to share IP addresses: either because they are part of a shared hosting web server environment or because an IPv4 network address translator (NAT) or proxy server acts as an intermediary agent on behalf of its customers, in which case the real originating IP addresses might be hidden from the server receiving a request. A common practice is to have a NAT hide a large number of IP addresses in a private network.
Source: Wikipedia