customize my permalinks to /?tegory%/%postname%/

I want to customize my permalinks to /%category%/%postname%/

I created a htaccess. file in my blog server directory where the index.php file exists

I saved the Save Changes button in the dashboard admin settings permalinks.

I clicked on the View Site button

I clicked on various posts to observe the url, but I received a 404 error.

I went back to the dashboard admin settings permalinks.

in textarea box was the following code

<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /disability/
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /blog/index.php [L]
</IfModule>

I copy and pasted the code into htaccess. file and Ftped the file to
my blog server directory where the index.php file exists

I chmod the file to 666 which is Owner and Group anf Public Read and Write permissions

I clicked on various posts to observe the url, but I still received a 404 error.

I set the permalinks structure back to the default and I am not receiving the 404 error.

What did I do wrong in trying to try customizing my permalinks to /%category%/%postname%/