The "ALTER DATABASE name TIME ZONE ..." is rejected
THE "ALTER DATABASE name TIMEZONE TO LOCAL" is rejected
Please update documentation or provide correct syntax
It works as described in the documentation:
steve=> alter database steve set timezone to local; ERROR: must be owner of database steve
postgres=# alter database steve set timezone to 'US/Pacific'; ALTER DATABASE postgres=# alter database steve set timezone to default; ALTER DATABASE
More specifically the first listed syntax only applies if the inherent database "option" you wish to set is one of:
ALLOW_CONNECTIONS allowconn
CONNECTION LIMIT connlimit
IS_TEMPLATE istemplate
What you want to do is setup a default User-Database Configuration (GUC) value (which in this case applies to all users connecting to this database); which is what the last 4 syntax specifications pertain to - as noted in the description section on that page.