IP address not assigned by DHCP if cable is plugged after boot

Symptoms:

• Boot OpenEmbedded Linux system (probably other distributions as well) with the network cable unplugged. ifconfig shows eth0:avahi interface with a dummy IP address
• Plug in the Ethernet cable – no changes in ifconfig. I expected DHCP to assign an IP address
• ifdown eth0 && ifup eth0 solves the problem, but is inconvenient and can not be automated easily

Turns out, a few things were missing:

1. ifplugd and ifupdown packages need to be installed;
2. In the end I removed avahi-daemon and avahi-autoipd from my image – the dummy IP is confusing.

Now the network is configured automatically whenever the cable is plugged in, during boot or later