Cut chicken thighs into 1/2 inch strips. Season the chicken with salt and pepper.
Prepare Thai red curry paste:
Place dried chillies in a small heatproof bowl. Cover with boiling water. Stand for 10 minutes or until softened. Drain. Meanwhile, place coriander and cumin in a small frying pan over medium heat. Cook for 1 to 2 minutes or until fragrant. Allow to cool completely. Place dried and fresh chillies, galangal, garlic, onion, lemongrass, kaffir lime leaf, coriander root, shrimp paste and spice mixture in a food processor. Process until finely chopped. Add oil. Blend until a smooth paste forms. Refrigerate in an airtight container for up to 1 week.
Now in a small bowl, whisk the coconut milk with the curry paste and fish sauce until combined. Heat a large skillet until very hot. Add 2 tablespoons of the vegetable oil and heat until just smoking. Add seasoned chicken pieces in a single layer. Cook over high heat, turning once, until the chicken is browned but not cooked through, 4 to 5 minutes. Transfer the chicken to a plate and pour off the fat in the skillet.
Add the remaining 1 tablespoon of vegetable oil to the skillet. Add the mushrooms and stir-fry over high heat until lightly browned, about 5 minutes. Stir in the ginger and garlic, stir-fry for 1 minute.
Add the chicken, red curry mixture and the water and bring to a boil. Reduce heat and simmer for 2 to 3 minutes or until the chicken is cooked through.
Transfer the chicken and curry sauce to a serving bowl and garnish with peanuts and cilantro. Serve immediately with rice and lime wedges.