Untar/unzip distribution. Start reading instructions If it's the updated Diku distribution on this site the instructions are found in the file called INSTALL_NOTES You'll have to decide which operating system you want to run it on. You'll have to make sure a compiler and tools are installed.
The right direction would be not to pick this codebase to start with unless you have a very good reason to do so. Otherwise, I personnly use Eclipse CDT with Cygwin on Windows to develop a Diku/merc/Rom base, and when I am ready to push it on a server (a centos) I an test it in a virtual machine with a Fedora installed with Ecipse as well, and I can use Valgrind there to check for memory leak or Buffer overrun. The advantage being I have the same tool on both Oses.