I have a flimsy grasp of DNS. Nonetheless, in order to install a local development copy of Wordpress MU, I needed to create a fake domain, which I called local.dev. It and all subdomains simply resolve to 127.0.0.1. Apache then directs to the correct folder.

I installed PowerDNS, and got it working properly with a MySQL backend. I didn't feel comfortable, but since it worked, I didn't ask any more questions. The bizarre thing is it requires an internet connection to resolve correctly, and now I need to use it offline.

If I am offline, Chrome provies the error:

Error 105 (net::ERR_NAME_NOT_RESOLVED): The server could not be found.

If you need more information, I am happy to provide it.