I'm setting up a Survey 123 form that needs to be filled in out in the field by external contractors, Do these contractors need to have a ArcGIS online account to be able to access and use my survey?
If you choose to keep your survey private (only the contractors have access), the users filling in the survey would need ArcGIS Online logins. Survey123 also supports sharing forms out to everyone, which does not require a login.
So this means, if I share a form out to everyone. The person who needs to fill out the form can download the Survey123 app onto a device and then fill out the form without a login??
That is correct. If a survey is shared publicly, anyone can submit data to it (from a web browser, or from the Survey123 field app). More details about working with public surveys available in https://community.esri.com/groups/survey123/blog/2016/11/10/getting-started-with-public-surveys .