I am not 100% sure but it likely is what your machine is called within the local network. I do not know if it has much use in a home network but it is used in windows networks in corporate environments to allow things like WINS and DNS to resolve internal machine ip.
From a privacy standpoint that is pretty minor. If you would use wireshark and capture a web HTTP session it is actually telling the server all kinds of things about your machine. The OS, the broswer and even the patch levels. Then you have all the tracking cookies and scripts.
Even with VPN you have to be very very careful. Sites like facebook are extremely intrusive. If you run a script blocker you will see facebook come up on tons of sites not related...