Only one level of includes is allowed

TL;DR: Terragrunt allows exactly ONE level of include. If your unit includes a file that itself has an include block (the classic _envcommon file that includes the root), the run fails. Include every file directly in the unit instead of chaining.

a/b/terragrunt.hcl includes a/mid.hcl, which itself includes root.hcl.
Only one level of includes is allowed.

Steps

1. Map the chain: which file does the unit include, and does THAT file have its own include block?

Expected: you find the second hop (often an _envcommon file including the root).

1. Flatten it: give the unit both includes directly with distinct labels:

   include "root" {
     path = find_in_parent_folders("root.hcl")
   }
   include "envcommon" {
     path           = "${dirname(find_in_parent_folders("root.hcl"))}/_envcommon/service.hcl"
     merge_strategy = "deep"
   }

Expected: no included file contains an include block.

1. Re-run.

Expected: the error is gone.

When this applies

• The error names a chain of two or more includes.
• _envcommon-style shared files that include the root, included by units.
• Deep trees where each level includes the one above.

When it doesn't apply

• A single include that fails to resolve: that's Include configuration not found, different fix.
• Merge surprises with multiple sibling includes: that's merge_strategy (shallow vs deep), not chaining.

Tool versions

All Terragrunt 1.x (verified on 1.1.3; upstream issue #1566 tracks lifting the limit).

Why it happens

Includes are resolved in a single pass with no recursion support. Chained includes would need multi-pass resolution, which Terragrunt doesn't do, so it rejects chains outright rather than resolving them partially.

Edge cases

• Include blocks merge by label and are additive, so flattening doesn't lose config; it just moves the declarations.
• Anchor paths to a marker file (find_in_parent_folders("root.hcl")) rather than counting ../ segments, which break when a unit moves.