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Does the dealer hit or stand on soft 17?

It depends on the table - the felt says either “Dealer must stand on all 17s” (S17, better for the player) or “Dealer must hit soft 17” (H17, adds about 0.2% to the house edge).

What soft 17 is

A soft 17 is any 17 containing an ace counted as 11 - ace-six, or ace-five-ace, for example. Because the ace can drop to 1, the hand cannot bust on the next card, so a dealer who must hit soft 17 gets a free improvement attempt.

Why H17 helps the house

When the dealer hits soft 17 they sometimes bust - but they improve to 18-21 often enough that the rule adds roughly two-tenths of a percent to the house edge. It is one of the first rules to check, right after the blackjack payout.

How it changes strategy

Under H17 a few basic-strategy plays tighten up: double 11 against an ace, double ace-7 against a 2, and surrender 15 and 17 against an ace where surrender is offered. The full grid is in the basic strategy chart, and rule-by-rule wording is in rules & variants. Then practice free.