NOTE: This is an alternative branch off from my previous Hostapd guide, which I really recommend going through before this.
In my previous hostapd guide, I used dhcpd to assign IP addresses to the clients connecting to the access point. While this works fine for most scenarios, it is an overkill to use dhcpd for such situations where normally the number of clients is 2-3, or around 20 at max. For such cases, dnsmasq is a better option.
Install dnsmasq from somewhere
# Arch Linux sudo pacman -S dnsmasq # Ubuntu sudo apt-get install dnsmasq