I thought that it was just coded into the name and key. Having to have an Internet connection is a REAL pain as I am bringing up a new computer and it is far from ready to bare to the vicissitudes of the world.
Yes, TCMD needs an internet connection to access the registration server. If you cannot access the internet (i.e., closed system or proxy server), you can request a manual key. (Since Windows also needs an internet connection at installation time, this generally isn't much of a burden.)