From a tutorial here:
http://ankurm.com/blog/api/using-localhost-for-facebook-app-development/1091/
I tried to set up a Local development Area for my Facebook
2018 working solution
It took me ages to figure this out, so I'm going to share my solution.
I tried all the suggested answers, but nothing worked for me, and in the end all I had to do was to go to https://developers.facebook.com/apps/YOUR_APP_ID/fb-login/settings/, and add my full callback url in the Valid OAuth redirect URIs box.
In my case, using ruby on rails, my url looked like this http://localhost:3000/user/auth/facebook/callback.
And right after I added it, everything started working! Hope this helps someone else facing this issue.