Currently, geographical information is interpreted and adopted in a wide range of context, and used for meeting diverse demands, such as, battlefield, traffic management, or public safety. With such an explosive increase of location-based applications, a considerable amount of research on the localization technique has been carried out. Among them, RSS (Received Signal Strength)-based approach is used especially for the indoor localization due to intrinsic limitations of the indoor environment. In this paper, we perform theoretical and empirical studies on enhancing the accuracy of the RSS-based localization on the IEEE 802.15.4 network. To this end, we set up an indoor testbed and implement a localization system on it. In addition to the theoretical analysis of the localization algorithm that we used, an empirical analysis on the effect of the factors which affect the accuracy of a localization system is carried out. Finally, we suggest some critical guidelines that should be considered for building a highly accurate localization system.