Upload the xml file

Before starting the process it's good to take some security measures:

• download a backup of your theme
• use a test blog to install the new theme

Downloading a backup of your current theme

The installation process is easy, but some errors may occur. To avoid mess up your blog, it's highly recommended that you always have a copy of your current theme before making any changes.
To get your backup:

1. Locate the Customize button and click on the arrow next to it
2. When the modal window is open, click on Backup

Doing the installation process on a test blog

Having a test blog is also highly recommended. You can try all the plans and ideas you may have for your blog without messing it.
Making the installation of your new theme on a test blog, you can set up all your personal information, do all customizations you may want, and when you have done completely, you can just download your perfectly finished new theme and upload it on your main blog. By doing this way, your blog will not be closed to the public for long.

Installing the .xml file

1. Locate the Customize button and click on the arrow next to it
2. Click on Restore
3. When the modal window is open, click on Upload

Your theme is installed!
The next step is to set up your personal information. Blogger will keep demo content on gadgets when the new theme is installed. You can also keep the demo blog open on your browser to make it easier to mimic it. 

1. Go to Layout on the Blogger dashboard vertical menu.
2. Remove completely all the gadgets from your old theme — unless you want to keep them on your new theme. In this case, rearrange them on the sections through the blog.
3. Save the changes and move to the next item on the instructions list.

Troubleshooting

Error: The theme could not be parsed