I am certain there is some way to configure systemd-resolved to actually use internal DNS servers so you can resolve your local hostnames. But nothing I’ve tried have worked, and I don’t actually need this wild local DNS thing.

Here’s the problem — systemd-resolved creates an /etc/resolv.conf file that uses a localhost address as the nameserver — and that may very well forward requests out to Internet DNS servers. Which don’t have any clue about your internal DNS zones — thus you can no longer resolve local hostnames. Whenever I see 127.0.0.53 in /etc/resolv.conf, I know systemd-resolved is at work.

[lisa@linux ~]# cat /etc/resolv.conf
# This is /run/systemd/resolve/stub-resolv.conf managed by man:systemd-resolved(8).
# Do not edit.
#
# This file might be symlinked as /etc/resolv.conf. If you're looking at
# /etc/resolv.conf and seeing this text, you have followed the symlink.
#
# This is a dynamic resolv.conf file for connecting local clients to the
# internal DNS stub resolver of systemd-resolved. This file lists all
# configured search domains.
#
# Run "resolvectl status" to see details about the uplink DNS servers
# currently in use.
#
# Third party programs should typically not access this file directly, but only
# through the symlink at /etc/resolv.conf. To manage man:resolv.conf(5) in a
# different way, replace this symlink by a static file or a different symlink.
#
# See man:systemd-resolved.service(8) for details about the supported modes of
# operation for /etc/resolv.conf.

nameserver 127.0.0.53
options edns0 trust-ad
search example.com

To disable this local name resolution, stop and disable systemd-resolved, unlink the /etc/resolv.conf file it created, and restart NetworkManager

[lisa@linux ~]# systemctl stop systemd-resolved.service
[lisa@linux ~]# systemctl disable systemd-resolved.service
[lisa@linux ~]# unlink /etc/resolv.conf
[lisa@linux ~]# systemctl restart NetworkManager
Removed /etc/systemd/system/multi-user.target.wants/systemd-resolved.service.
Removed /etc/systemd/system/dbus-org.freedesktop.resolve1.service.

Voila, /etc/resolv.conf is now populated with reasonable internal DNS servers, and you can resolve local hostnames.

[lisa@linux ~]# cat /etc/resolv.conf
# Generated by NetworkManager
search example.com
nameserver 10.1.2.33
nameserver 10.1.2.66