It's a single player game unless you enable "Start Server" in the menu. Just put a password on it and send invitations to friends. You don't need to host a dedicated server if you don't want to, that's only if you want the game world available 24/7 so other players can join when you're not around. If you just enable the server option in your menu, the world will be online only when you're in it; on the other hand, you can move your characters between worlds, so you can go play on your friend's server any time as well.