To install a theme manually via XAMPP do the following:
Step 1: Locate XAMPP’s htdocs folder. This is normally Applications>>XAMPP>>HTDOCs on Mac or My Computer>>C:>>XAMPP>>HTDOCs on Windows (I think – someone might need to correct me on that).
Step 2: If your site is installed in a sup-directory in htdocs, go there. If not skip to next step.
Step 3: Open the wp-content folder
Step 4: Open the themes folder
Step 5: Copy in your downloaded theme and extract it there (if its zipped)
Step 6: Go to your WordPress Dashboard and go to the Appearance button on the left and click Themes from the drop down. Find your newly installed theme and hit Activate.