If I understood you correctly, for Pi-hole to take over for DNS and DHCP, I need to tick that DHCP server enabled on the Pi-hole UI.
Please correct me if I'm wrong, this will enable me the adblock and local domains as well as handle DHCP for the network. Is that correct?
Moving forward to configuring it. Checking that checkbox asks me to disable DHCP on the router.
Does setting DHCP-Option as shown below automatically disables DHCP on the OpenWrt, or I need to configure something else?
Assuming that IP is pointing at my Pi-hole instance.