If you are running a LAN inside a larger network, you definitely should
use central name servers if they are available. The advantage of this is
that these will develop rich caches, since all queries are forwarded to
them. This scheme, however has a drawback: when a fire recently
destroyed the backbone cable at our university, no more work was
possible on our department's LAN, because the resolver couldn't reach
any of the name servers anymore. There was no logging in on X-terminals
anymore, no printing, etc.
Although it is not very common for campus backbones to go down in
flames, one might want to take precautions against cases like these.
One option is to set up a local name server that resolves hostnames from
your local domain, and forwards all queries for other hostnames to the
main servers. Of course, this is applicable only if you are running
your own domain.
Alternatively, you can maintain a backup host table for your domain
or LAN in /etc/hosts. In /etc/host.conf you would then
include ``order bind hosts'' to make the resolver fall
back to the hosts file if the central name server is down.