From OpenWrt Project documentation:
/etc/hostsDNS entries are configured. dnsmasq will utilize these entries to answer DNS queries on your network.
[IP_address] host_name host_name_short ...
192.168.1.1 router OpenWrt localhost 192.168.1.2 debian-server 192.168.1.3 ubuntu-laptop
I realized in my configuration (I am using default) dnsmasq is looking in /tmp/hosts/dhcp.cfg0* for answering DNS queries on my lan and not /etc/hosts.
I am using openwrt 18.06.01
Is this normal behavior not reflected in docs?