Is it better to create a Git repository at the root level or in the WordPress theme directory?

If I’m working on whole project for a client (WP install + custom theme + plugins), I put everything in one repository. My thinking is that I created one “solution” based on WP + some existing plugins + my added code, and thus I should track it as one solution. When WP or a plugin is updated I need to test it on a dev and/or staging environment anyway, so it’s better to know the version control status of the whole project.

If I’m working on one plugin, I put it outside the WP directory and use symlinks from multiple installations to simplify testing. The repository is then only the plugin. The only problem there is that __FILE__ won’t work, so I work with a define() to simulate my path.

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