I have 12 peonys in my garden. Arborvitaes protect them from the North wind, see the picture. Peonys bloom every summer. I fertilize them using the general fertilizer 20-20-20.
It appears, however, that grass is taking over, and suppresses peonys.
My question is: do I place mulch around peonys, or remove grass completely (arranging a flower bed)? What is the best condition for them?
Thank you.

Are you saying they are not blooming or you are getting less blooms. What do you mean the grass is suppressing the peonies?

Personally to my eyes if I have a garden area I remove the grass and mulch the garden area. I could see a problem of the peonies blooming less or not at all because of the grass. The peony should only be planted 1 to 2 inches below soil. I could see the grass build up and peony will end up planted to deep to bloom,