You're missing indentation. Take a look at the examples on the module page.
Here's a good explanation: http://yaml.org/spec/current.html#id2519916

On Wednesday, 18 March 2015 19:38:02 UTC+1, Michael Bushey wrote:
>
> I'm attempting to use the first example on page: 
> http://docs.ansible.com/linode_module.html
>
> ⇒ ansible-playbook --version
> ansible-playbook 1.7.2
>
> ⇒ ansible-playbook -i ../hosts create_web.yml
> ERROR: datacenter is not a legal parameter at this level in an Ansible 
> Playbook
>
>  ⇒ cat create_web.yml 
> ---
> - local_action:
>   module: linode
>   api_key: 'Myapikeyishere'
>   name: web1
>   plan: 2
>   datacenter: 2
>   distribution: 130
>   password: 'mypasword'
>
> any ideas?
>
>
>

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