Work on a different theme without disturbing live theme…

I’m a little new at WordPress so bare with me.

I want to try a different theme than the one that is currently live on my server. How do you install a new theme and work on it without disturbing my “Live” site. Do I create a new folder in my root like “Test_Theme” and upload the theme’s zip file and work on it there? Then if I work on the “Test” theme in the test folder and want to overwrite the old theme, how do I move the new theme to my root and make it live with out destroying all the work I did? Do I just copy all the files to my root folder?

Thanks for any help on this subject!

Kevin