As Gail said - you definitely need a backup copy of your Photos Library, if you are using iCloud. It is not an archival backup.
Apple is storing your photos in iCloud, and probably doing everything to keep them safe for you.
- But Apple does not offer to give you access to the editing history. iCloud Photo library is syncing all changes immediately across all devices. If you delete a photo from iCloud it will be gone everywhere and you cannot recover it without a backup.
- And Apple is not storing an exact copy of all library items in iCloud, essentially it is storing the moments, albums, photos, some metadata. Your projects and smart albums, and the Faces albums are missing.
From the Photos Help: https://help.apple.com/photos/mac/1.0/?lang=en#/phtf5e48489c
Note: iCloud Photo Library keeps your photos and videos up to date but doesn’t store your projects or Smart Albums. To keep a backup of these items, make sure you back up your Photos library to another storage device.
What iCloud Photo Library is giving you is great, but it does not suffice as a backup. With iCloud you have an off-site storage of your photos. If your house burns down, you can recover your photos from iCloud. But if you delete photos from your library and regret it later, you cannot recover them from iCloud.
And another thing: If you need to restore a complete photo library with many thousands of photos you may not want to have to wait for them to download from iCloud. That can take weeks for a large library. Restoring from a local backup will be much quicker and does not require a stable internet connection.