I did fencing long ago as one of my first jobs, it was the old style stockade fence that had the dowels, never did much of the rail fencing but it's the same concept.
You do have to dig the holes, mark out on the ground a few holes, make the marks on center then dig the depth, the trick is after the first hole you have to over dig the diameter a little so you can swing those posts over and put the rails in, leaving a somewhat equal space around the post to pack the dirt in around it.
I was young and would get discouraged when I hit a big root or a rock since we were using manual post hole diggers, the old timer would dig 4 holes to my 1 and when he tamped them in it felt like they were set in cured concrete.
One absolute necessary tool for that job is the fence-mans bar, a 5-6 foot heavy bar with a cutting edge on one side for roots or clay and a round tamping puck on the other end for packing the soil around the posts, I've seen them at home depot. Another tool is the dowel cutter if you need a short section and have to shorten the rails, that's a speciality tool that's not cheap, you might be able to borrow one from who ever is supplying the material for you, I suppose you could use a hatchet.
Good luck, JB,