Need to know more about the product used for your coating. Generally, the loose coating will need removing, the exposed surface primed and then the new coating can be applied.

I don't see why you can't just scrape off the loose material but this will look strange with out some of the original coating. After the peeling areas are patched your siding can be painted. Removing all of your texture coating will involve a lot of time and labor to sand it off. It would be cheaper to stucco over your siding.