Replacing ISP router's DHCP

Installing and Using OpenWrt
3

Sure, you have to

  1. reconfigure the LAN IP Address of your OpenWrt router to 192.168.178.x (anything below 192.168.178.100, but probably not 192.168.178.1 as this is likely your existing router).
  2. Add the DHCP options for the correct gateway and DNS servers to your DHCP configuration; probably you need to add them also to your LAN interface.
  3. Make sure to connect the OpenWrt LAN ports to ISP router LAN ports
  4. disable DHCP on your main router
  5. Test; if it doesn't work, your clients might be getting the wrong gateway address, i.e. use the OpenWrt device as gateway and/or DNS. This can be solved by defining the proper dhcp_option to the DHCP server, see here.

There are several drawbacks, though: All routing is performed by your ISP router, no wired traffic passes your OpenWrt router. If you use Wireless, only the wireless connection itself is handled by OpenWrt. The firewall on OpenWrt is not used, either.

I do not see much advantage over the ISP's DHCP server, unless you need specific options not present in the ISP router.

As an alternative, you could connect the WAN port of the OpenWrt router to the ISP router and disable masquerading on OpenWrt (to avoid double-NAT). This is described for example here. You should still be able to configure port-forwarding et al on your ISP router.

Edit: I re-read your post, especially this section:

and I do not understand it. I thought the OpenWrt router was connected to the ISP router? Is there a separate WAN connection to the OpenWrt router? You could also provide a network diagram to make it clearer.

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