Enable file repositories by going to Site administration > plugins > repositories > manage repositories. You can create a directory then point the repository at it at, for example, moodledata/repository/examplerepository
Setup a file system repository instance by clicking the "manage" link next to "file system" then clicking "create a repository instance". When you come back to that page click "delete" next to your new repository instance. It says deletion was successful then the following is displayed.
The delete actually succeeded.