Strictly speaking you do not really need it, but it is handy to keep your forum from getting too clogged up with old posts. It also prevents your forum from slowing down because it has to load so many active posts.
Archiving is just a mechanism of removing old posts from the usual database tables into other tables. It is not mandatory and in many cases it is not even relevant from a forum's performance point of view (and archiving definitely isn't related to the concept of active posts - much less to the loading of those posts).