App note from Renesas on what are digitally controlled potentiometers and their operations. Link here (PDF)
Digitally Controlled Potentiometers (DCPs) brought about a new way to adjust resistance in analog circuitry. Mechanical Potentiometers were replaced by DCPs because of their ability to control resistance digitally using interfaces such as I2C, SPI, Pushbutton, 2-wire, and 3-wire (up/down). Unlike mechanical potentiometers where resistance is set by hand or a tool, the resistance of a DCP is communicated by an interface. This interface receives a value that is translated by the decoder from a binary to a decimal number, which sets the wiper into a corresponding position.