Joomla Extension installation problem : "JFolder::create: Could not create directory"

If you are facing the problem to install any extensions under joomla (on live or local) with the following errors;

JFolder::create: Could not create directory
Warning: Failed to move file!

Then there would be following issues;

1. The PHP temporary directory is not set
( The PHP temporary directory is the directory that PHP uses to store an uploaded file before Joomla can access this file. )
Solution:
To resolve it

• Go to your main Joomla directory and look for a folder called /tmp/ and if there isn't one, create it.
• Check for its File Permission which should be 0755. If not set the folder permission to 0755. This is because the /tmp/ folder must be readable and writable. (To 

PS: To change the permission, go to Hosting Cpanel > File Manager > Select the directory (do right click it and Change Permissions ). For Window Hosting Panel, it can be slightly different, check for for that.

2. The /tmp/ folder path on the Global Configuration must be set correctly.
Solution:

• In your Joomla Administrator area, go to Site > Global Configuration > Server.
• Check to see that the Path to Temp Folder is the path to the one you found our created in the last step. This should be the server path not the URL (http://yoursite.com etc)

If you've transferred your site between servers this will definitely need to be checked. You can also change this by changing the configuration.php file. There is a complete tutorial on all the sections of the configuration.php file here.