The extension will work on localhost without any problem. I´m copying you the content from a thread published on our forum:
many people have asked me:"how does the licenesing effect my site when I move my site from dev to production"
Well, here's how you do it.
The following example is for development locally, demo to your clients on a dev server, then deployment to the clients production server.
If you enter livesite.com as your dev domain field, then download the component.
When downloading, enter 'dev' in the subdomains box.
This will allow you to use the component on:http://127.0.0.1
(production OR demo site)http://www.livesite.com
(production OR demo site)http://dev.livesite.com
THEN, when your client is happy, you simply enter the Prod domain name in our system and download the component again.
Extract the downloaded file.
If you have simply MOVED your site to a new domain for your client, you need to extract the license.txt file from the component zip file and replace the license.txt file on the production site.
The license file is located in the /administrator/components/com_magazine directory
(this assumes the component is iJoomla magazine)
Now, you many be asking, "But how do I move my site?"
You can buy a third party component names JoomlaCloner, but I find it to be very buggy and hart to use.
The manual method is...
1) Export your database via phpmyadmin (from your cpanel or plesk)
2) create a new database on the new server.
3) Import this exported dbase on your new server.
4) Zip the entire website into an archive. (use JoomlaXplorer)
5) Upload this file to the new site and unzip it.
(Note, you may have a problem with file ownership and permissions, so you might need tech support to reset them for you)
6) modify the configuration.php file to suit the paths on the new server and the new database parameters.
Your site should now be working.
If I've missed anything, please let me know and I'll update this article.
If you have any doubts with this please let me know. Feel free to contact me via email to ricardo at ijoomla dot com or from our website (contact us link).