The homepage settings allow you to either display a static page for your homepage. Or you can choose to display your latest blog posts.
You just need to choose the relevant radio button. If you choose “Your latest posts”, no other settings will be displayed. But if you select “A static page”, you will have to select the homepage and posts page from the given dropdown.
You can only choose the pages from the dropdown if you have already made the pages. You can create new pages, either from the dashboard or by clicking over “+ Add New Page”.