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why it is said kidney stones, if kidney failure is not caused by kidney stones.

Yes they can cause, but stats are low... They are called kidney stones because they are formed in the kidney. Primary kidney stones are formed in the kidney

whether to destroy the stone just by surgery or who has chronic only with dialysis?

there are different modalities for treatment of kidney stones, very small stones dissolve spontaneously w/o treatment, small ones require medical treatment and there are diff procedures for taking the stones out.