first few things to look at:
this will tell you the IP address of your dns server (can be static, or come from your dhcp server, or be set in NetworkManager.
will tell you your dns domain name
will do a dns lokkup, and tell you the IP of www.google.com
Will tell you if /etc/hosts takes precedence over dns service, etc ...
Last one: dnsmasq is an easy to use dns server, it's as easy to setup as editing /etc/hosts. Use apt-get or yum to install it