Cut Out - Peg Question

I noticed template had a peg for each body part. is that necessary or can you have each body part on its own layer parented properly and all attached to one master peg?

Not necessarily, it all depends what you would like to do with your character…
If you like, here is an example how I do most of my rigging:

Otherwise, check out the link below:

thanks! official template led me to believe otherwise