There are 3 ways to install an extension. You can upload an extension, install from a directory or install from a URL

a. Upload an extension:

- Download the extension to your local machine as a zip file package.

- From the backend of your Joomla site (administration) select Extensions -> Install/Uninstall.

- Click the Browse button and select the extension package on your local machine.

- Click the Upload File & Install button.

- Note that modules and plugins must be enabled before they will work.

b. From a directory

- Unzip all of the files locally.

- Transfer the files (using FTP) to a folder in the install directory (for example administrator/components/com_installer/components) for the type of extension you are installing.

- Use the installer, but select "install from directory" indicating the correct folder name. This folder name should be an absolute path from the root of the filesystem.

c. From a URL:

This will install your extension from any URL as long as you give the full URL. (ex: http://domainname.com/your_extensionname.zip) The only problem with this option is depending on your connection speed and file size it can take quite a while to retrieve the file from an external site, which could cause installation issues.