The use of 169.x.x.x addresses are defined within a standard colloquially known as APIPA - Automatic Private IP Addressing.
In a nutshell, if a network device has not been assigned a fixed (static) address and cannot obtain one by asking (DHCP), the device says to itself, "Well, I'd better make up an address of my own so I can communicate on this network", so it assigns itself an APIPA address, which start at 169.254.0.1 and run up to 169.254.255.254.
If you suddenly find your computer has an address within the AIPIA range it usually means that the device on the network dishing out addresses (the DHCP server) is not contactable for some reason; it may be switched off or your network cable has become disconnected, for example.