The hydra has a nervous system characterized by a nerve net. A nerve net is a collection of separate, but "connected" neurons. Neurons are connected by synapse. Communication between neurons can be in both directions at the synapse within a nerve net. The nerve net is concentrated around the mouth. Unlike higher animals, the hydra does not have any grouping of nerve cell bodies. In other words, there are no ganglia.
The hydra does have specialized cells for touch and chemical detection though.