That is the field where you statically set the host name to the assigned IP address. Once set, you can enter either the IP or hostname to access the device.
Example: You have a Ubuntu PC that you want to statically map IP 192.169.1.5 and Hostname of Ubuntu. Since your pfSense domain name is localdomain you can either enter the IP address or Ubuntu.localdomain to access the machine. You do not enter the domain name in the hostname field.