Run this command once you are logged in through terminal.
sudo chown -R www-data:www-data (your wordpress folder)
This is for a Linux ubuntu host running Apache.
This will fix the FTP request that wordpress gives you if you try to install a plugin or update through the admin portal.
Many people who use WordPress have a hosting provider that offers FTP, which makes it easy on several levels for file permissions, but not everyone uses this. Some people use AWS such as myself and ‘ssh’ into their servers to perform certain actions.
WordPress wasn’t made to be super friendly for this type of setup, so making sure you have all the right permissions can be crucial in saving you several hours. I recommend learning about different permissions for wordpress from their reference page: http://codex.wordpress.org/Changing_File_Permissions