Yes, you need to create an IP pool in a DHCP server. Since you are directly connected you can use the controller to do so.
If its factory defaulted you will have VLAN 1 = 172.16.0.254 / 24 as the address on the controller itself.
You will want to navigate on the WEBUI to Configuration/IP/DHCP Server and
a. Activate/Enable the server with the checkbox on this screen, and
b. Create a scope for the 172.16.0.0 255.255.255.0 VLAN (corresponding to VLAN 1), set default router to 172.16.0.254, and name to AP_Pool as an example.
Then click 'apply' and you should have a DHCP pool established.
If you want to see the IP service in action, drop into the CLI and issue 'show ip dhcp binding' and 'show ip dhcp stat' to show how the DHCP server is functioning ...
Let us know how you make out.
JF