Replace or Skim drywall?

The crack will show back up in short time if you just skim coat over it. Id take a utility knife and cut out the crack (v notch). When you do this the reason it cracked could reveal itself. It could be that the previous guy didn't tape properly. If that's the case fill up the cut out crack with hot mud. Tape it with all purpose mud (id use Fibafuse Tape). Then finishing coats use plus 3. However depending on what you find you might just need to replace a small section of drywall.