Ethernet shield programming
You need to determine what the network address is of the LAN you have connected the arduino to. A router can often give you this information. Alternatively you can connect a computer to the same network and look at the computers network settings (this varies depending on what OS you use). Then you have determine what IP address is available on that network. You will enter this in the ip variable in your example.

The internet is not required for your application, however you do need the arduino to be connected to a LAN and another device (probably a standard computer) to invoke the arduinos server behaviour.

To test that it works, you can open an internet browser on the second device and type in the IP address that you have configured for the arduino into the address bar.