Out of the box, docker can be installed and run on alpine linux without issue. However, libvirt requires a few extra steps before it can be used with docker and terraform.
# install bridge utils
apk add bridge
# create a bridge (edit as needed)
cat <<<EOF >> /etc/network/interfaces
auto libvirtbr0
iface libvirtbr0 inet static
address 192.168.1.2
netmask 255.255.255.0
gateway 192.168.1.1
bridge-ports eth0
bridge-stp 0
EOF
# restart networking
rc-service networking restart
/etc/sysctl.conf:
# @see https://serverfault.com/questions/963759/docker-breaks-libvirt-bridge-network
net.bridge.bridge-nf-call-iptables=0
echo AllowTcpForwarding yes >> /etc/ssh/sshd_config