So, following this question here and a number of other questions about subdomains on localhost, we learned that /etc/hosts isn't capable of handling wildcard routes and we need a DNS system. Ok, I have installed Bind9 on my machine (Ubuntu). Now, could someone finally explain how to set it up to route *.domain.local to 127.0.0.1
You need to add the following A record to your "local" zone:
Don't forget to configure your machine to use that DNS server (in /etc/resolv.conf).