pi@raspberrypi:~ $ cat /etc/hosts
127.0.0.1       localhost
::1             localhost ip6-localhost ip6-loopback
ff02::1         ip6-allnodes
ff02::2         ip6-allrouters

127.0.1.1       raspberrypi
pi@raspberrypi:~ $ dig localhost && cat /var/log/pihole.log | grep 'localhost'

; <<>> DiG 9.9.5-9+deb8u6-Raspbian <<>> localhost
;; global options: +cmd
;; Got answer:
;; ->>HEADER<<- opcode: QUERY, status: NOERROR, id: 56261
;; flags: qr aa rd ra; QUERY: 1, ANSWER: 1, AUTHORITY: 0, ADDITIONAL: 1

;; OPT PSEUDOSECTION:
; EDNS: version: 0, flags:; udp: 4096
;; QUESTION SECTION:
;localhost.                     IN      A

;; ANSWER SECTION:
localhost.              300     IN      A       127.0.0.1

;; Query time: 15 msec
;; SERVER: 127.0.0.1#53(127.0.0.1)
;; WHEN: Tue Sep 20 15:06:04 EDT 2016
;; MSG SIZE  rcvd: 54

Sep 20 15:06:04 dnsmasq[458]: query[A] localhost from 127.0.0.1
Sep 20 15:06:04 dnsmasq[458]: /etc/hosts localhost is 127.0.0.1
pi@raspberrypi:~ $ cat /var/log/pihole.log | grep 'toshiba'
pi@raspberrypi:~ $ ping -c 1 192.168.1.3
ping: icmp open socket: Operation not permitted
pi@raspberrypi:~ $ sudo ping -c 1 192.168.1.3
PING 192.168.1.3 (192.168.1.3) 56(84) bytes of data.
64 bytes from 192.168.1.3: icmp_seq=1 ttl=128 time=3.50 ms

--- 192.168.1.3 ping statistics ---
1 packets transmitted, 1 received, 0% packet loss, time 0ms
rtt min/avg/max/mdev = 3.506/3.506/3.506/0.000 ms
pi@raspberrypi:~ $