Should I use Vagrant or Docker for creating an isolated environment?

The short answer is that if you want to manage machines, you should use Vagrant. And if you want to build and run applications environments, you should use Docker.

Vagrant is a tool for managing virtual machines. Docker is a tool for building and deploying applications by packaging them into lightweight containers. A container can hold pretty much any software component along with its dependencies (executables, libraries, configuration files, etc.), and execute it in a guaranteed and repeatable runtime environment. This makes it very easy to build your app once and deploy it anywhere – on your laptop for testing, then on different servers for live deployment, etc.