ansible does not see hosts (unreachable)

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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.

2 Answers
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