Fix Issue 9: Enforce configuration precedence rules

- Established explicit precedence: ENV vars > config.json > defaults
- Updated fastapi_app.py to only sync config.json when ENV var not set
- Added precedence logging to show which source is used
- Documented precedence rules with examples in CONFIGURATION.md

Key principle: ENV variables always take precedence, config.json is
fallback only. This ensures deployment flexibility and clear priority.

All config tests passing (26/26)

docs/CONFIGURATION.md

@@ -10,24 +10,42 @@ This document provides a comprehensive reference for all configuration options i
 
 ### Configuration Sources
 
-Aniworld uses a layered configuration system:
+Aniworld uses a layered configuration system with **explicit precedence rules**:
 
-1. **Environment Variables** (highest priority)
-2. **`.env` file** in project root
-3. **`data/config.json`** file
-4. **Default values** (lowest priority)
+1. **Environment Variables** (highest priority) - Takes precedence over all other sources
+2. **`.env` file** in project root - Loaded as environment variables
+3. **`data/config.json`** file - Persistent file-based configuration
+4. **Default values** (lowest priority) - Built-in fallback values
+
+### Precedence Rules
+
+**Critical Principle**: `ENV VARS > config.json > defaults`
+
+- **Environment variables always win**: If a value is set via environment variable, it will NOT be overridden by config.json
+- **config.json as fallback**: If an ENV var is not set (or is empty/default), the value from config.json is used
+- **Defaults as last resort**: Built-in default values are used only if neither ENV var nor config.json provide a value
 
 ### Loading Mechanism
 
-Configuration is loaded at application startup via Pydantic Settings.
+Configuration is loaded at application startup in `src/server/fastapi_app.py`:
 
-```python
-# src/config/settings.py
-class Settings(BaseSettings):
-    model_config = SettingsConfigDict(env_file=".env", extra="ignore")
+1. **Pydantic Settings** loads ENV vars and .env file with defaults
+2. **config.json** is loaded via `ConfigService`
+3. **Selective sync**: config.json values sync to settings **only if** ENV var not set
+4. **Runtime access**: Code uses `settings` object (which has final merged values)
+
+**Example**:
+```bash
+# If ENV var is set:
+ANIME_DIRECTORY=/env/path  # This takes precedence
+
+# config.json has:
+{"other": {"anime_directory": "/config/path"}}  # This is ignored
+
+# Result: settings.anime_directory = "/env/path"
 ```
 
-Source: [src/config/settings.py](../src/config/settings.py#L1-L96)
+**Source**: [src/config/settings.py](../src/config/settings.py#L1-L96), [src/server/fastapi_app.py](../src/server/fastapi_app.py#L139-L185)
 
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