diff --git a/.gitignore b/.gitignore
index 7b72b37..3a3b7bf 100644
--- a/.gitignore
+++ b/.gitignore
@@ -11,7 +11,6 @@
 .rspec_status
 
 # Personal, private notes kept locally and excluded from the repo
-# (e.g. the development diary "how-i-created-my-first-ruby-gem-with-kiro.md").
 /private-notes/
 
 # Built gem artifacts
@@ -20,3 +19,13 @@
 # Gems should not commit their lockfile (Bundler resolves it per environment).
 # Committing it here pinned Bundler 4.x, which breaks CI on Ruby < 3.2.
 /Gemfile.lock
+
+# Local example consumer project: Bundler resolves its lockfile per environment
+# (same reasoning as the root Gemfile.lock above), so it is not committed.
+/examples/local-consumer/Gemfile.lock
+/examples/local-consumer/.bundle/
+graphify-out/
+.graphify-cache/
+
+# Custom File
+hermes-run.sh
diff --git a/.kiro/steering/structure.md b/.kiro/steering/structure.md
index 9c97b19..5c07e5d 100644
--- a/.kiro/steering/structure.md
+++ b/.kiro/steering/structure.md
@@ -3,7 +3,7 @@
 ## Directory layout
 
 ```
-password_forge/
+password-forge-ruby-gem/             # repo root
 ├── lib/
 │   ├── password_forge.rb            # Entry point: requires all components
 │   └── password_forge/
@@ -19,7 +19,16 @@ password_forge/
 │       ├── charset_spec.rb
 │       ├── validation_spec.rb
 │       └── generator_spec.rb
+├── examples/                        # Runnable local demos (not packaged)
+│   ├── smoke_test.rb                # Loads the gem from source and prints samples
+│   └── local-consumer/             # Mini "external" project using the gem via path:
+│       ├── Gemfile
+│       └── run.rb
+├── docs/                            # Extended documentation (not packaged)
+│   ├── README.md                    # Docs index
+│   └── local-testing.md            # How to try the gem locally
 ├── sig/                             # RBS type signatures
+├── bin/                             # setup + console helper scripts
 ├── .github/workflows/
 │   ├── main.yml                     # CI: RSpec matrix + RuboCop
 │   └── release.yml                  # Trusted Publishing on v* tags
@@ -33,6 +42,9 @@ password_forge/
 └── LICENSE.txt
 ```
 
+`Gemfile.lock` is generated per environment and git-ignored (see Tech), so it is
+not part of the tracked tree above.
+
 ## Architecture
 
 The internal design mirrors the original C# separation of concerns while
diff --git a/.kiro/steering/tech.md b/.kiro/steering/tech.md
index 62760b3..816e01f 100644
--- a/.kiro/steering/tech.md
+++ b/.kiro/steering/tech.md
@@ -12,7 +12,7 @@ The gem has **no runtime dependencies**.
 
 ## Common commands
 
-Run from the `password_forge/` directory:
+Run from the repository root (`password-forge-ruby-gem/`):
 
 ```bash
 bundle install            # install development dependencies
diff --git a/CHANGELOG.md b/CHANGELOG.md
index 0cc0691..e6cb866 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -7,6 +7,27 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ## [Unreleased]
 
+## [0.0.2] - 2026-09-05
+
+### Added
+
+- `examples/` folder with runnable local demos: `smoke_test.rb` (loads the gem
+  from source and prints sample passwords) and `local-consumer/` (a minimal
+  external project that depends on the gem via a `path:` reference).
+- `docs/` folder with a documentation index (`docs/README.md`) and a
+  local-testing guide (`docs/local-testing.md`).
+- "Trying it locally" section in the README linking to the examples and docs.
+
+### Changed
+
+- Excluded `examples/` and `docs/` from the packaged gem.
+
+### Fixed
+
+- Corrected the directory tree and command paths in the Kiro steering docs
+  (`structure.md`, `tech.md`), which still referenced a nested `password_forge/`
+  root left over from an older project layout.
+
 ## [0.0.1] - 2026-09-05
 
 ### Added
@@ -22,5 +43,6 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - `PasswordForge.generate` convenience wrapper.
 - RSpec test suite, RuboCop configuration and README.
 
-[Unreleased]: https://github.com/devandreacarratta/password-forge-ruby-gem/compare/v0.0.1...HEAD
+[Unreleased]: https://github.com/devandreacarratta/password-forge-ruby-gem/compare/v0.0.2...HEAD
+[0.0.2]: https://github.com/devandreacarratta/password-forge-ruby-gem/compare/v0.0.1...v0.0.2
 [0.0.1]: https://github.com/devandreacarratta/password-forge-ruby-gem/releases/tag/v0.0.1
diff --git a/README.md b/README.md
index 5ecf6a3..8300b26 100644
--- a/README.md
+++ b/README.md
@@ -10,12 +10,18 @@ categories are enabled by default, and a clear error is raised if you disable
 every one of them. Randomness is provided by Ruby's `SecureRandom`.
 
 This gem is also a showcase for building and shipping a Ruby gem the **Kiro
-way**: it ships with Kiro skills, project steering, hooks and an MCP server (see
-the [Roadmap](#roadmap)).
+way**. Kiro skills, project steering, hooks and an MCP server are being added
+incrementally (see the [Roadmap](#roadmap)).
 
 ## Installation
 
-Install the gem and add it to the application's Gemfile by executing:
+> **Not on RubyGems yet.** The first public release is planned for 0.1.0 (see
+> the [Roadmap](#roadmap)). Until then, see [Trying it
+> locally](#trying-it-locally) to run the gem from source or via a local path
+> dependency.
+
+Once published, install the gem and add it to the application's Gemfile by
+executing:
 
 ```bash
 bundle add password_forge
@@ -97,11 +103,26 @@ A non-positive or non-integer `length` raises `ArgumentError`.
 | `numeric_case` | `0`–`9`                  |
 | `special_case` | `` !"#$%&'()*+,-./:;<=>?@[\]^_`{|}~ `` |
 
+## Trying it locally
+
+You can run the gem without installing it from RubyGems:
+
+- **From this repository:** `ruby examples/smoke_test.rb` prints a few sample
+  passwords straight from the source tree.
+- **From another project:** add `gem "password_forge", path:
+  "/path/to/password-forge-ruby-gem"` to that project's `Gemfile`, run `bundle
+  install`, then `require "password_forge"`. See
+  [`examples/local-consumer/`](examples/local-consumer) for a working example.
+
+Full instructions, including the interactive console and building a local
+`.gem`, are in [docs/local-testing.md](docs/local-testing.md).
+
 ## Roadmap
 
 `PasswordForge` is developed in incremental, tagged releases:
 
 - **0.0.1** — Core generator, character sets, validation, tests, docs.
+- **0.0.2** — Local-testing examples (`examples/`) and documentation (`docs/`).
 - **0.1.0** — First public release on RubyGems.org via Trusted Publishing.
 - **0.2.0** — Kiro skills for gem authors (feature TDD, version bump, release).
 - **0.3.0** — Project `.kiro/` folder with steering and conventions.
@@ -113,9 +134,12 @@ A non-positive or non-integer `length` raises `ArgumentError`.
 
 After checking out the repo, run `bin/setup` to install dependencies. Then run
 `bundle exec rake` to run the tests and the linter. You can also run
-`bin/console` for an interactive prompt to experiment.
+`bin/console` for an interactive prompt to experiment, or
+`ruby examples/smoke_test.rb` for a quick check straight from source.
 
-To install this gem onto your local machine, run `bundle exec rake install`.
+To install this gem onto your local machine, run `bundle exec rake install`. For
+the full local workflow — including running it from a separate project and
+uninstalling — see [docs/local-testing.md](docs/local-testing.md).
 
 ## Contributing
 
diff --git a/docs/README.md b/docs/README.md
new file mode 100644
index 0000000..c8e5d65
--- /dev/null
+++ b/docs/README.md
@@ -0,0 +1,14 @@
+# PasswordForge documentation
+
+Extended documentation for the `password_forge` gem. This folder is not shipped
+in the published gem; it lives in the repository for contributors and curious
+readers.
+
+## Contents
+
+- [Local testing](local-testing.md) — how to try the gem locally, both from
+  this repository and from a separate project that depends on it via a local
+  path.
+
+More guides will be added here as the project grows (see the roadmap in the
+[main README](../README.md)).
diff --git a/docs/local-testing.md b/docs/local-testing.md
new file mode 100644
index 0000000..ce9639f
--- /dev/null
+++ b/docs/local-testing.md
@@ -0,0 +1,132 @@
+# Trying PasswordForge locally
+
+This guide shows how to run the gem without publishing it, both from inside this
+repository and from a separate project that depends on it via a local path.
+
+All commands assume you start from the repository root
+(`password-forge-ruby-gem/`) unless stated otherwise.
+
+## 1. From this folder
+
+### Run the smoke test
+
+The quickest check. It loads the gem straight from `lib/` (no install needed)
+and prints a few sample passwords:
+
+```bash
+ruby examples/smoke_test.rb
+```
+
+You should see a default password, a numeric PIN, a letters-only password, and
+the `NoCharsetSelectedError` being raised on purpose.
+
+### Use the interactive console
+
+`bin/console` boots an IRB session with the gem already required:
+
+```bash
+bin/console
+```
+
+```ruby
+PasswordForge.generate
+PasswordForge::Generator.new(length: 32).generate
+```
+
+### Install it onto your machine
+
+To install the current checkout as a normal gem on your system:
+
+```bash
+bundle exec rake install
+```
+
+After that, `require "password_forge"` works from any Ruby project on the same
+machine.
+
+## 2. From a different project (local path dependency)
+
+This is how you consume the gem from another application while developing it,
+without pushing anything to RubyGems.
+
+In the other project's `Gemfile`, point Bundler at your checkout:
+
+```ruby
+# Gemfile of your other project
+source "https://rubygems.org"
+
+gem "password_forge", path: "/absolute/path/to/password-forge-ruby-gem"
+```
+
+Then, from that project:
+
+```bash
+bundle install
+```
+
+```ruby
+require "password_forge"
+
+PasswordForge.generate
+```
+
+Bundler resolves the gem from the given path, so a plain `require` works as if
+the gem had been installed from RubyGems. Any edit you make in the gem source is
+picked up on the next run — no reinstall needed.
+
+### Ready-made example
+
+A working example of this setup lives in
+[`examples/local-consumer/`](../examples/local-consumer). It is a minimal
+project whose `Gemfile` references the gem with a relative path (`../..`):
+
+```bash
+cd examples/local-consumer
+bundle install
+bundle exec ruby run.rb
+```
+
+## 3. Alternative: build and install a .gem
+
+If you prefer to test the packaged artifact rather than a path dependency:
+
+```bash
+gem build password_forge.gemspec
+gem install ./password_forge-0.0.2.gem
+```
+
+This installs the exact files that would ship to RubyGems (the `examples/` and
+`docs/` folders are intentionally excluded from the package).
+
+## 4. Uninstalling / switching to the published gem
+
+If you installed the gem locally (via `rake install` or `gem install`) and want
+to remove it, use `gem uninstall` rather than deleting files by hand:
+
+```bash
+gem uninstall password_forge
+```
+
+To see what is installed, or to target a specific version:
+
+```bash
+gem list password_forge
+gem uninstall password_forge -v 0.0.2
+```
+
+Once the gem is published, switching to the RubyGems release is a plain
+uninstall followed by a normal install:
+
+```bash
+gem uninstall password_forge
+gem install password_forge
+```
+
+> **Note:** `password_forge` is not on RubyGems yet (the first public release is
+> planned for 0.1.0 — see the roadmap in the [main README](../README.md)). Until
+> then, `gem install password_forge` will not find it, so the local install and
+> path-dependency approaches above are the way to try it.
+>
+> While developing, the path dependency in section 2 is usually the most
+> convenient: there is nothing to install or uninstall, and source edits are
+> picked up on the next run.
diff --git a/examples/local-consumer/Gemfile b/examples/local-consumer/Gemfile
new file mode 100644
index 0000000..74bd98f
--- /dev/null
+++ b/examples/local-consumer/Gemfile
@@ -0,0 +1,13 @@
+# frozen_string_literal: true
+
+# Minimal "external" project that consumes password_forge from local source.
+#
+# The path is relative to this Gemfile: two levels up is the gem repo root,
+# where password_forge.gemspec lives. In a real project you would point this
+# at wherever you checked out the gem, e.g.:
+#
+#     gem "password_forge", path: "/absolute/path/to/password-forge-ruby-gem"
+#
+source "https://rubygems.org"
+
+gem "password_forge", path: "../.."
diff --git a/examples/local-consumer/run.rb b/examples/local-consumer/run.rb
new file mode 100644
index 0000000..4f4fdcb
--- /dev/null
+++ b/examples/local-consumer/run.rb
@@ -0,0 +1,17 @@
+# frozen_string_literal: true
+
+# Demo entry point for the local-consumer example project.
+#
+# This mimics an external application that depends on password_forge. Bundler
+# resolves the gem from the local path declared in the Gemfile, so a plain
+# `require "password_forge"` loads it as if it had been installed normally.
+#
+# Run it from this directory:
+#
+#     bundle install
+#     bundle exec ruby run.rb
+#
+require "password_forge"
+
+puts "Using password_forge v#{PasswordForge::VERSION} from a local path dependency."
+puts "Generated password: #{PasswordForge.generate}"
diff --git a/examples/smoke_test.rb b/examples/smoke_test.rb
new file mode 100755
index 0000000..79e69f8
--- /dev/null
+++ b/examples/smoke_test.rb
@@ -0,0 +1,38 @@
+#!/usr/bin/env ruby
+# frozen_string_literal: true
+
+# Smoke test for PasswordForge.
+#
+# Loads the gem straight from the local source tree (no install required) and
+# prints a few sample passwords so you can eyeball that everything works.
+#
+# Run it from the repository root:
+#
+#     ruby examples/smoke_test.rb
+#
+require_relative "../lib/password_forge"
+
+puts "PasswordForge v#{PasswordForge::VERSION} — smoke test"
+puts "-" * 48
+
+puts "Default (all sets, length 16):"
+puts "  #{PasswordForge.generate}"
+
+puts "Numeric PIN (length 4):"
+puts "  #{PasswordForge::Generator.new(
+  upper_case: false, lower_case: false, numeric_case: true, special_case: false, length: 4
+).generate}"
+
+puts "Letters only (length 24):"
+puts "  #{PasswordForge::Generator.new(
+  numeric_case: false, special_case: false, length: 24
+).generate}"
+
+puts "No character set selected (expected error):"
+begin
+  PasswordForge::Generator.new(
+    upper_case: false, lower_case: false, numeric_case: false, special_case: false
+  )
+rescue PasswordForge::NoCharsetSelectedError => e
+  puts "  raised #{e.class}: #{e.message}"
+end
diff --git a/lib/password_forge/version.rb b/lib/password_forge/version.rb
index 76c4aa4..6093ea9 100644
--- a/lib/password_forge/version.rb
+++ b/lib/password_forge/version.rb
@@ -1,5 +1,5 @@
 # frozen_string_literal: true
 
 module PasswordForge
-  VERSION = "0.0.1"
+  VERSION = "0.0.2"
 end
diff --git a/password_forge.gemspec b/password_forge.gemspec
index bd4d6e5..7d641a1 100644
--- a/password_forge.gemspec
+++ b/password_forge.gemspec
@@ -28,7 +28,7 @@ Gem::Specification.new do |spec|
   spec.files = IO.popen(%w[git ls-files -z], chdir: __dir__, err: IO::NULL) do |ls|
     ls.readlines("\x0", chomp: true).reject do |f|
       (f == gemspec) ||
-        f.start_with?(*%w[bin/ Gemfile .gitignore .rspec spec/ .github/ .rubocop.yml])
+        f.start_with?(*%w[bin/ examples/ docs/ Gemfile .gitignore .rspec spec/ .github/ .rubocop.yml])
     end
   end
   spec.bindir = "exe"