ansible does not see hosts (unreachable) - ansible

Question

I have recently installed ansible
demaunt#demaunt-pc:~$ ansible --version
ansible 2.3.1.0
config file = /etc/ansible/ansible.cfg
configured module search path = Default w/o overrides
python version = 2.7.12 (default, Nov 19 2016, 06:48:10) [GCC 5.4.0 20160609]
I have added 2 lines into: /etc/ansible/hosts
[local]
192.168.1.102
and changed uncommented 1 line in ansible.cfg:
# uncomment this to disable SSH key host checking
host_key_checking = False
Still when I do:
ansible all -m ping
192.168.1.102 | UNREACHABLE! => {
"changed": false,
"msg": "Failed to connect to the host via ssh: Warning: Permanently added '192.168.1.102' (ECDSA) to the list of known hosts.\r\nPermission denied (publickey,password).\r\n",
"unreachable": true
}
1) Why my localhost is unreachable
2) Why this program is so smart that it tries to connect via ssh even when this option was disabled.

Answer 1

To define localhost and use local connection instead of ssh, define hosts as follows:
[local]
localhost ansible_connection=local
This way we define local group with localhost host with local connection.

Answer 2

The option host_key_checking = False does not mean Ansible will not connect to hosts. It's an option related to the ssh option StrictHostKeyChecking (see the ssh_config man page).
Ansible needs to log into the host to perform the ping. Your local host at IP 192.168.1.102 is probably not running the sshd daemon, or some other issue is preventing the ssh login.
Suggest you review the documentation at http://docs.ansible.com/ansible/intro_configuration.html.