The first question on any drywall job is not how big the damage is. It is whether the damage is the problem or the symptom. A doorknob hole is the problem. A brown ring on a ceiling is a symptom, and patching it without finding the leak just means doing the work twice.
For impact damage, the rule is simple. Anything smaller than a fist gets a patch, backed properly so it cannot flex. Anything larger than a hand gets cut back to the studs and replaced with a real piece of board, because a floating patch in an open field of drywall will telegraph through the paint within a year.
Water damage is different. If the board is soft, stained through, or has lost its paper, it comes out. Gypsum that has been wet does not come back, and painting over it traps whatever is behind it. We cut to the nearest studs, dry out the cavity, fix the source, and then close it up.
Nail pops and seam cracks are usually framing moving with the seasons, not bad drywall work. The fix is to refasten near the original screw, cut out the loose compound, and re-tape rather than just skim over the crack. Skimming buys you about eight months.
Either way, the part that determines whether a repair disappears is the feathering. A patch coated eight inches wide looks like a patch in raking light. The same patch feathered out two to three feet catches the light the way the rest of the wall does, and nobody can tell you where it was.