All one had to do is scrape down and paint the home every five to ten years depending how much sun hits the home and how much shade. Rather than spend some money taking care of the wood siding someone allowed the siding to deteriorate. Properly applied paint protects the wood siding from drying out and deteriorating. After some time moisture gets behind the paint and into the wood. Then the wood siding can not hold paint. The paint starts to peel. As the paint peels the wood is no longer protected from water and moisture. As more and more moisture enters the wood the problem just gets worse.
The time the paint looks like this the siding has buckled is warped and no must be removed and replaced. Removing and replacing siding is far more expensive than keeping it painted. Additional problems sometimes occur as the water and moisture that have gotten behind the siding allow latent problems and hazards to occur that just compound the expense of repairing and replacing the siding.
Sheathing behind the siding will sometimes also be damaged. Moisture getting behind siding can also allow mold to grow between the rear of the siding and the exposed side of the drywall on the interior of the home. Latent damages within the wall will not be visible during a home inspection however the damages may exist and may be expensive to cure.
Damages like these are not at all common, however it is possible they will still exist and will still require corrective actions.