How does Terraform determine the correct provider version to use?

Terraform determines the correct provider version to use by utilizing the 'required_providers' block in the configuration. This block explicitly specifies the providers that the Terraform configuration is going to use, including the desired version constraints.

When you define a 'required_providers' block, you can specify exactly which version of a provider you want Terraform to utilize, or you can set constraints that allow Terraform to select compatible versions. This mechanism helps ensure that your infrastructure code is using the correct, tested, and compatible versions of providers, maintaining stability and preventing unexpected changes or breakages in your setups.

In contrast, referencing provider documentation alone does not define which version should be used; provider documentation may provide information about available versions, but it does not enforce any version on its own. Automatically selecting the latest version could lead to compatibility issues, and checking installed versions on the local machine won't necessarily guarantee that the appropriate version is being used in the context of the specific configuration, as other configurations may exist in different projects or environments. Therefore, the 'required_providers' block is the authoritative source for provider versioning within Terraform configurations.