If you have trouble to make permalink works on your localhost’s WordPress you can use these steps to make it works. But, you have to make sure that you are using Windows and Apache2.2 as your local server.
The Indication
When you point your browser to the address of your page or post that has custom permalink in it, say http://www.test.com/about/, it shows page Not Found “The requested URL /about/ was not found on this server” like this one. You may try the solution as follow.
Not Found
The Solution
- Make sure to add a line to your C:\Windows\System32\drivers\ets\hosts. What to add? Add 127.0.0.1 localhost.
- Open your Apache configuration file httpd.conf and find this line AllowOverride None and then change it to AllowOverride All
- Find this line too #LoadModule rewrite_module modules/mod_rewrite.so and uncomment it by deleting # sign. Don’t forget to save.
- Add your .htaccess to your WordPress directory and then update your permalink in your WordPress administration page. If you don’t know how to create .htaccess file in Windows, please read how to create the .htaccess file.
Now refresh your page and it will show what you want. If you have any question please don’t hesitate to ask. Cheers 
