When adopting microservice architecture and using Docker, it's essential to understand how Docker images work to avoid large sizes that can negatively impact performance. A Docker image is essentially a file system that tracks changes made by instructions in the Dockerfile. To keep images small, it's crucial to minimize the output of these layers. This includes avoiding changes to file ownership and permissions unless absolutely necessary, cleaning up after commands that leave behind unnecessary files, creating and maintaining custom base images, and being cautious when using community images that may disappear or change over time. By following these best practices, developers can optimize their Docker images and ensure they remain micro, efficient, and scalable.