Presently i create a joomla 1.7 component. Every time i wish to test the component, create a zip from the component source folder and do the installation into my joomla system. After testing i un-install the component, code some stuff and redo the procedure.

It is possible to way to really make it less complicated?

You will get some detail from this doc. It offers some subjects regarding development process.

if you won't want to zip you'll be able to use Install Directory enter image description here

As you are setting up/removing I suppose that you're testing that a part of the application. I recommend while using method referred to by Doers above.

If you want to produce a working installer and concentrate on the core logic of the application you are able to give our Joomla Component Creator a spin.