Terraform does not execute modules in the order you write them. It builds a dependency graph from references, and that graph determines execution order.
In this lesson, the focus is on how module outputs and inputs act as dependency signals. An output creates an upstream edge. An input receives that edge. That connection forces Terraform to apply resources in the correct sequence.
The key insight is that data flow defines execution order. If a module references another module’s output, Terraform enforces that relationship. If you remove that reference and replace it with a hardcoded value, the dependency disappears. Terraform may then apply resources in the wrong order without warning.
The lesson also covers when to use depends_on. This is only necessary when Terraform cannot infer a dependency from references. Overusing it creates unnecessary constraints in the execution plan.
The result is a clear rule: module interface design directly controls execution behavior. Outputs and inputs are not just configuration structures. They are the signals Terraform uses to build a safe and correct dependency graph.