Hi Mandeep,
Yes it is possible to have the GTM tag fire on local pages. All you really need is to make sure that the GTM Container is present and that you have an internet connection so that the tags can send their data somewhere (like Google Analytics). If you preview the container, will the debug window (at the bottom) show at all? Otherwise that would indicate that the GTM container isn't being loaded at all. If it does show up, make sure that your tags have appropriate triggers so that they are instructed to fire.
But the TL;DR - Yes, you can use GTM on "localhost".
PS. If you created a new property in GA, it can take a few hours before you actually start seeing the data (even in real time).