"Retouching" photos has been around a lot longer than digital photos.
In the old days, particularly in portraiture, a print was made in the darkroom and small brushes and chemicals, e.g. inks, were used to remove blemishes on the subject, white spots caused by specks of dust on the negative, etc.
Whether the old way of doing things still exists, I cannot say.
It is redundant to say "photo retouch a picture." "Retouch" can stand by itself, e.g. "Retouch a picture."
The advent of digital photography has opened up a whole new world of photo manipulation, of course, and one can say "Digitally retouching a picture, among other, perhaps more precise, expressions indicating what was done.
I would not use "retouch" where the content of a photo was altered, e.g. adding a component that wasn't there in the first place or moving an object from where it actually was at the time of exposure. In this case, bibliolept's post applies.