how do I work on a domain which has not been transferred or does not exist?

You can set your computer fetch the site you are working to your computer. To do this you only need to change the host file on your computer. Before you start panicking and won't read any more, have in mind this is simpler then it sounds. If you are running a Linux computer then your host file is in the following folder /etc/hosts. On the Mac you find the host file in /private/etc/hosts. On Windows 7 and 8 you will find the host file c:\WINDOWS\system32\drivers\etc\. On windows you might have to choose to show the hidden files and folder in setup. On Windows it is recomended to open notepad as Administrator

1. Click Start → All Programs → Accessories
2. Right click Notepad and select Run as administrator
3. Click Continue on the “Windows needs your permission” UAC window.
4. When Notepad opens Click File → Open
5. In the filename field type C:\Windows\System32\Drivers\etc\hosts
6. Click Open

Into this file you enter the ip address of the server (your hosting at 1984) and add the name of the domain. It should look like this:

Ip address yourdomain.is

93.95.225.163 orwell.is www.orwell.is

This way your computer will fetch the web site for orwell.is at the ip address 93.95.225.

It is very important to change the hosts file in a text editor like notepad or gedit, not a wordprocessor like LibreOffice or word in Microsoft Office