I have a wordpress site installed on domain www.example.com in my root directory. I want to install another wordpress site on www.example.com/blog. How to do this?
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It should be possible to do the install, but there is a little configuration needed if you missed it: http://stackoverflow.com/questions/12209600/another-wordpress-installation-in-a-subfolder
But I don’t understand why you want to do that. Unless you want two very different websites. If you want the same site more or less, then use a Custom Post Type that you call blog and that’s it.
You can follow this tutorial for setting up WordPress in sub-directories using NGINX: https://www.digitalocean.com/community/questions/how-to-configure-multiple-wordpress-sites-in-subdirectories-in-nginx
If you would like to manage the two sites from one interface, I would suggest setting up WordPress multi-site: https://www.digitalocean.com/community/tutorials/how-to-set-up-multiple-wordpress-sites-using-multisite
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