If you have a VPS or a dedicated server plan and you want to have your own name server like ns1.domain.com and ns2.domain.com you will need to run DNS on your hosting server. Make sure you have atleast 2 IPs dedicated allocated to DNS server. If you have directadmin control panel things would get even easier.
Before you change your nameservers for your domain, first you will need to register that nameserver with corresponding IPs with godaddy, as otherwise you always will get ERROR DETECTED message and wont be accepted. I was having nightmares with this until i figured out why.
Here is how you register your nameservers with Godaddy.
Go to Domain Details > Domain summary > View/modify there you have to register your name servers along with 2 IPs.
Enter ns1.yourdomain.com, ns2.yourdomain.com along with 2 ip addresses.
Once you do that you can change the corresponding nameservers to your domain and it will be accepted.
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