When you use the internal DNS implementation (the default), Squid always uses the DNS name servers to resolve names and addresses. The external dnsserver program, on the other hand, may check a local database—the hosts file—before querying the DNS. With this directive, you can make Squid preload the contents of a hosts file into its IP and FQDN caches.
Squid rereads the hosts file when you send it the reconfigure signal (squid -k reconfigure).
If you configure the append_domain directive, it’s appended to any single-component names in the hosts file.