As suggested in that article, you need to copy the jars, locales, etc folder from the MDM CE installation home ($TOP) into your local machine where IDE is running. From the workspace, create new folders and link the directories mentioned earlier. Also copy the locales folder under etc/default folder of the workspace. You should be set. Now if you are invoking your class with a main method, could be Java extension point or the DocstoreLoader class given in that article, you need to run the class arguments like the following
-DCCD_ETC_DIR=C:\prj\MDMCS10_1\etc -DTOP=C:\prj\MDMCS10_1\etc\default -classpath $CLASSPATH
In above given args, replace the underlined section with your local absolute path containing the MDM CE folder. the As far as MDM CE is running then you will be get context and talk to MDM CE application. I would presume that you have a local JRE installed and MDM CE jars in the local folder are kept in your Java Project's classpath.