This can be accomplished very easily through most if not all FTP clients. If you right-click on the directories you wish to change, then click on permissions (this is for most FTP clients). Change them to whichever permissions level you desire, however, know that the file manager and other directories such as packages need to be 755 or you may run into issues. Which directories are you wishing to "make private"?

if i am running this server locally and have direct access to the files how do i change the permission

What OS are you running? You can go into the command line and alter file permissions that way.
if Windows 7:
cd to the file you are trying to change the permissions of

http://www.cyberciti.biz/tips/windows-change-access-permissions-fro...
Otherwise, if Linux or Unix
http://catcode.com/teachmod/chmod_cmd.html...