Gute Deutsch- und Englischkenntnisse in Wort und Schrift
This means you have to know German.
a) In Germany it is typical to list the skills your IDEAL candidate would have. Usually they expect you to have most of the skills, but not all.
b) The IT-Market in Germany is empty and everyone is looking for people.
Given the two above, try your luck!
The rest is the standard stuff you should know from other wanted ads. Rosetta or Google can help you translate.
Do I have to be living in Germany to work for them?
Yes, probably. Some might offer some form of telecommuting but that is something really new here, so I would not bet on it.
Though living in Germany is actually quite nice.
If you would like to know anything more about working in Germany, just post here.
Btw: if you are invited to a face2face interview in Germany, they will pay for your travel (required by law).
Btw 2: if this company is not to your liking but you are still interested in working in Germany, pm me!