As we all know WordPress mu normally require sub domain or domain to install in local system.
Here are steps to configure wordpress mu in local system xampp.

You need to make a sub domain.
Open this  WINDOWSsystem32driversetchosts
Add local.domain (or whatever you'd like to call it) to the localhost line
Example :  127.0.0.1 localhost local.domain
Try this now - http://local.domain/
Done!!