169.254.0.0/16 is used for IPv4 address autoconfiguration, and is specified as such by RFC 3927. See also the Wikipedia article on link-local IPv4 addresses.
Microsoft calls it "Automatic Private IP Addressing". It may also be called "auto-IP" or by its abbreviation APIPA.
Disabling APIPA will prevent Windows from locally assigning link-local IP addresses to network interfaces.
To disable APIPA, and thus prevent Windows from assigning a 169.254.0.0/16 IPv4 or fe80::/10 IPv6 address to network interfaces where no working IP configuration methods exist, you can refer to Microsoft KB article 244268. In short:
- Use the registry editor (running as administrator) to navigate to either HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\Tcpip\Parameters\Interfaces\adaptername (a single network adapter) or HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\Tcpip\Parameters (the entire computer).
- Create or edit a DWORD value named
IPAutoconfigurationEnabled and set its value to
0. A value of 0 indicates that APIPA is disabled.
- Reboot your system.
To restore the default, delete the IPAutoconfigurationEnabled value. To explicitly state the current default (that you want APIPA enabled), set the value to 1.