At home I am having very slow internet connection, which becomes pain while downloading packages with yum. To make this process faster I have created local repository from CentOS media.
After installing CentOS you should have /etc/yum.repos.d/CentOS-Media.repo. We will be using the same repo file to create our local repository. Adjust the existing repo file as per our need

# CentOS-Media.repo
#
# This repo is used to mount the default locations for a CDROM / DVD on
#  CentOS-5.  You can use this repo and yum to install items directly off the
#  DVD ISO that we release.
#
# To use this repo, put in your DVD and use it with the other repos too:
#  yum --enablerepo=c5-media [command]
#
# or for ONLY the media repo, do this:
#
#  yum --disablerepo=\* --enablerepo=c5-media [command]
[c5-media]
name=CentOS-$releasever - Media
baseurl=file:///media/CentOS/
        file:///media/cdrom/
        file:///media/cdrecorder/
gpgcheck=0
enabled=1
gpgkey=file:///etc/pki/rpm-gpg/RPM-GPG-KEY-CentOS-5

Now we need to mount cdrom to /media/CentOS/ or /media/cdrom/ or /media/cdrecorder/. I am having iso image of CentOS, so I will be mounting the same image at /media/cdrom

mount CentOS.iso /media/cdrom -o loop

How to use:

yum --enablerepo=c5-media install package_name
CentOS Local Repository
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