Generally, when a recipe calls for grated lemon peel, it’s referring to the zest, which is the colored outer portion of the skin. It contains aromatic oils that are full of flavor. There are several ways to remove it, depending on the texture you want.
Zest removed with a vegetable peeler and chopped adds both texture and flavor to recipes. Be sure the strips contain none of the white pith, which is bitter.
A citrus zester has five small holes at its cutting edge that produce long, thin strips of zest without the pith; they provide flavor and a fine texture.
A fine grater creates ultra-thin pieces of zest, which are ideal when you want the flavor of the zest but not the texture.