Having trouble with 5 minute install on Step 2

I am stuck on STEP 2 when trying to install WordPress from download. My questions is, do I need hosting space to do this install? Could this be why I cannot proceed to step 2? Ideally I would like to design complete site, than when finished, I would like to purchase host. I also created an online site through there non downloadable platform on there blog’s server. But I cannot figure out how to install plug ins and themes from other sites to the online wordpress format. This is what led me to downloading wordpress. I figured I needed the downloable version to install all this. But again, I am stuck on step 2 and think I need host to continue. Here are the instructions on wordpress site for 5 min install.

1.Download and unzip the WordPress package if you haven’t already.
2.Create a database for WordPress on your web server, as well as a MySQL user who has all privileges for accessing and modifying it.
3. (Optional) Find and rename wp-config-sample.php to wp-config.php, then edit the file (see Editing wp-config.php) and add your database information.

Can I do this with no host? If so, how?