Assume your database.yml file looks like this:
{: .yaml}
development:
adapter:  postgresql
host:     localhost
encoding: unicode
database: proj_development
pool:     5
username: proj
password:
template: template0
test:
  adapter:  postgresql
  host:     localhost
  encoding: unicode
  database: proj_test
  pool:     5
  username: proj
  password:
  template: template0
production:
  adapter:  postgresql
  host:     localhost
  encoding: unicode
  database: proj_production
  pool:     5
  username: proj
  password:
  template: template0
First of all you must create postgresql user proj:
sudo su postgres
createuser proj
Then run psql, in postgres shell run:
ALTER ROLE proj CREATEDB;
\q
Update conf file /etc/postgresql/9.3/main/pg_hba.conf:
# IPv4 local connections:
host    all             all             127.0.0.1/32            trust
Then restart posrgresql:
sudo service postgresql restart
Then in project directory run:
rake db:create
rake db:migrate
Now it must works well.
Posted by konjoot to wiki (2014-01-06 12:23)