Just follow what you see on the screen.

On initial LXD installation, a message is shown both at package install
time and first run of LXD instructing the users to do "sudo lxd init".
That command then asks if you want to configure the network, if you do
and you set an IPv4 subnet big enough for your containers, then things
will work fine.

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https://bugs.launchpad.net/bugs/1571862

Title:
  No IP is issued for more than 251 containers

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