Does the iPhone support ad-hoc network mode? Can iPhones connect to one another without requiring an existing network? If so, how can I create an Ad Hoc network in my app?
Updated Answer:
Have a look at the MultiPeer Connectivity Framework (documentation link) introduced in iOS 7. NSHipster has a nice write-up on it (link). Although you don't get direct network access, you can easily pass data between devices, and even use other devices to act as middlemen to other devices nearby.
Legacy Answer:
iOS devices cannot make peer-to-peer networks using the built in Settings app or available APIs. However, if you want to send data between devices in your app you have three options.
You can use Game Kit, CoreBluetooth (in limited circumstances), or you can use something like CocoaHTTPServer.