How does Terraform know the order to create resources?

Terraform determines the order to create resources primarily through automatic dependency management. When Terraform analyzes the configuration files, it assesses the relationships between different resources. For instance, if one resource needs to reference the output of another resource (like an IP address or a database ID), Terraform understands these dependencies and constructs a dependency graph. This ensures that resources are created in the correct order, with each resource being provisioned only after its dependencies have been satisfied.

This automatic handling of dependencies alleviates the requirement for users to manually specify the order in which resources should be created, as Terraform intelligently interprets the necessary relationships. As a result, Terraform can optimize the resource creation process while ensuring that everything is provisioned successfully without user intervention in the order of operations.