When the theme is downloaded, you should uncompress it and upload the theme and the Skin folders of the Magento installation through FTP under the corresponding locations:
magento_folder/app/design/frontend/default/
and
your_magento_folder/skin/frontend/default/
Then the two folders should be renamed to match. As an example we will install the Modern theme. The names of the folders are modern-theme and modern-skin. They both have been uploaded to the respective locations and renamed to modern. Because the installation of the script was performed in the public_html/magento folder, the corresponding locations are:
public_html/magento/app/design/frontend/default/modern/
and
public_html/magento/skin/frontend/default/modern/
When you upload the folders, navigate to your Magento admin area -> System -> Configuration -> Design. Click on the option Themes and enter the name of the theme in the Default, Layout, Templates and Skin fields. Picture Click on the button [Save] to install your new Magento theme.
Or you can install a magento theme as follow :