Why Spring Boot Application class needs to have @Configuration annotation?

You understood it right.

@Configuration

@Configuration is an analog for xml file. Such classes are sources of bean definitions by defining methods with the @Bean annotation.

@Configuration is:

• not required, if you already pass the annotated class in the sources parameter when calling the SpringApplication.run() method;
• required, when you don't pass the annotated class explicitly, but it's in the package that's specified in the @ComponentScan annotation of your main configuration class.

For readability, classes that are even explicitly passed as sources may anyway be annotated with @Configuration - just to show the intentions more clearly.

Your current class is not really source of bean definitions, because it doesn't have any, but if you had @Bean annotated methods, Spring would see them.

@EnableAutoConfiguration

Can be used with or without @Configuration. It tells Spring to setup some basic infrastructure judging by what you have in the classpath. It's done by invoking a so called import class that's derived from the value of the @Import annotation that @EnableAutoConfiguration includes. Only one class should be annotated with @EnableAutoConfiguration, duplicating it doesn't do anything.

This answer may also be helpful to understand the Spring Boot initialization process: Which piece of code in Spring Boot actually registers dispatcher servlet for SpringMVC?

I think the main reason, why Spring Boot's @SpringBootApplication annotation automatically applies @Configuration is to allow to add bean definitions in the very same class. One of the main goals of Spring Boot is to allow you to create application fast and without extra movements. So by allowing you add bean definitions right into the Application's class, you don't need to create extra classes to hold your configuration. You have just 1 class and that's it.