Does ginger have to be peeled? If so how?

There's no reason to peel besides the aesthetics of it. There's no major flavor or nutritional difference either way. If the ginger is going to be seen then peel it, if not don't bother.

The best way to peel ginger is to use the edge of a small spoon to rub it off, it works really well, takes seconds, and doesn't waste as much as using a knife or peeler.

Agree with @GdD, that the best way by far to peel it is with a small spoon. If you have a sharp enough knife and are good with it, sure that'll work too (Or the peeler). I first learned this trick from Martin Yan (Yan Can Cook) probably almost 20 years ago... here's a more recent video of him showing this.

To answer your other question about why you'd peel it. It depends on the ginger you're getting. When ginger is young, the skin is very soft and peeling is not necessary. As ginger ages, it gets harder and at which point you will notice it. If the skin is nice and smooth, the ginger itself is quite firm, you're probably looking at a younger ginger. If the skin starts to get a little rough, then it might be worth peeling. Mostly what I source around where I am, it's mostly older stuff.

I don't know of a taste reason to peel ginger, however the papery peel is tough in texture.

I handle ginger in one of two ways: either I freeze it and grate it into my dish using a microplane - fresh ginger flavor instantly whenever I need it; or I chop it into a fine mince before adding. In a hearty textured dish, I guess peeling wouldn't be necessary, but in a finely textured sauce or custard I would definitely peel it.

When I peel ginger I do it one knob at a time. This requires deconstructing the rhizome into individual knobs and I find it convenient to just use a knob or two in a dish rather than measure precisely. I peel ginger using a paring knife on a cutting block rather than a vegetable peeler.

Another ginger trick I have used is to slice the entire rhizome wafer thin, place it in a jar, cover it with 100 proof vodka and place the jar, ginger and vodka in the freezer for a week. Once the first filling of vodka is gone, I usually do two more before I feel the flavor has been extracted from the ginger slices. I use the flavored liquor to add fresh ginger aroma and heat to dishes by adding it near the end of cooking. I have also been known to use 1/2 oz. of the ginger flavored liquor as the secret ingredient in a vodka martini, rather than bitters.

It is true that in many cases having ginger skin or not, does not make any difference in flavour.

However, in at least one case, you might want to skin the ginger - fresh ginger chili sauce. Otherwise, the skin and its texture might get in the way of enjoying the sauce. Especially, if the ginger is old. OTOH, the recipe might call for the explicit presence of ginger skin.

To skin a ginger, we normally use a short sharp knife to lightly scrape the skin off. No deep cuts. You do not need to remove every millimetre of skin. Especially around the bends, you might exercise restraint.

The older the ginger, the more difficult it is to skin it. A piece of ginger could be so old and shriveled that there might be no point to skin it anymore.

It is easier to skin a large piece of ginger by breaking it up by its branches.

But ... don't throw the skin away. They are for making ginger-lemon tea.

I scrape it with a blunt knife. Its important if you are making ginger juice for example as the skin blocks the holes of the grater.

Well I agree with all the knowledge in the other answers, but there is one aspect of this that is totally overlooked: Pesticides. If your vegs aren’t organic grown, many of them will contain significant amounts of pesticide residues. Even more so if you dont even bother to wash them with mild soap and water before using them (but even that kind of cleaning, cannot remove them all). So to get rid of health compromising pesticides, it would be a good idea to peel. Unfortunately I am not aware how "dirty" ginger is generally speaking, when it comes to pesticides, fungicides, etc. That's actually the reason I clicked to read about this issue: maybe someone knew.

I happen to know that third world country imports contains many more pesticides than produce from more developed countries, and where I live the ginger usually comes from China. So my guess would be that it actually contains quite a lot of "bad stuff" on that peel. Something I wouldn’t want to eat that is.

Peeling ginger is optional...
But we usually peel it easily:
1. soak the ginger in water for a couple of hours, which makes the skin soft and then it comes off easily.
2. then u can use the edges of a spoon to peel off the skin.

The simplest way to peel ginger is with a spoon.

Don't need to soak it or anything. Break it into manageable 'thumbs' and scrape the skin off with the edge of a dessert spoon.

Bear in min that if you are adding heat to your dish though ginger the spiciest part is the skin!!

Its optional, like potatoes or carrots if it is too dirty you scrape or else just cleaning is good enough.

I think it's best to skin the ginger root. I use a small knife. Keep the peelings for potpourri, not tea as the skin will most likely hold the pesticide used on the root in storage. To cover the wastage I buy an extra piece of root to make up the difference. If you must keep the skin, soak the root in a solution of baking soda and water for about half an hour (the amount of baking soda, judge for yourself) and then scrub the root well before rinsing. By the way, this goes for most fruit with skins, specially oranges.