Does having a displaced meniscus mean that i will need surgery to fix it? how did it get displaced?

Possibly: This means the meniscus is torn and a fragment is moving around from its normal position. If it hurts then arthroscopically have it trimmed. If it hurts to squat, twist, lunge, or do stairs, or get off the toilet or out of chairs then its reasonable to fix it.

Most likely, yes: A "displaced meniscu"s really means a displaced meniscus tear. Displacement cannot really happen without the meniscus having been torn. Usually the meniscus tears in the "white zone:, called so because it lacks a blood supply and therefore cannot heal. Occasional, ly , tears occur in the "red zone" and can be sewn together; time is of the essence in the repair of "red zone" tears.