A local install should be used for developing Modules, Providers, and Skins where you then create an install package of the Extension as zip file and upload to your production system.  Content should be included on the production environment.

For your Szenario you have first to add the domain name of the Site you want to have on your production system. Then following this instruction:

1. Backup Your DNN folder with all subfolders and files to a zip file.
2. Backup your DNN SQL Database using SQL Managemnt Studio
3. Transfer both files to your Production Server
4. Create an folder for your DNN instance on your production server
5. Create a new Site e.g 'Domainname.com' and an Application pool on the IIS of your Production Server forwarding to the DNN Folder
6. Set read permissions to your IUser (IUsers), and full permissions to your application pool user for your DNN Folder permissions
7. Connect to your SQL Server on production system
8. Create a new SQL user (best same name and password as on your develope environment) on your SQL Server.
9. Restore the database from SQL Backup file using SQL Management Studio, be sure dbo login is your SQL user.
10. Extract DNN Backup zip file to your DNN folder, be sure all permissions are inherit to all subfolders and files
11. Open your website.