Error connecting database

I'm just trying to run PGSQL and running the test for it. However I get this
message,

Connection to database 'template1' failed.
connectDB() -- connect() failed: No such file or directory
Is the postmaster running at 'localhost' and accepting connections on Unix
socket '5432'?

createdb: database creation failed on i-city.

What does that mean? Is it mean that the connect() file is not found under
my /usr/local/pgsql/bin?

Gan
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