Trying to set-up a local development environment

I am a complete newbie to the server side of things. My background has
been installing wamp (http://www.wampserver.com/en/), dumping files
into the www folder, and testing via localhost. It all just worked.

Recently I switched to linux (archlinux) and am trying to set-up a
local development environment. This is my project structure:

www
├── process.php
├── css
│ └── registration.css
├── images
│ ├── bg.png
│ ├── bg_content.jpg
│ ├── in_process.png
│ ├── in_use.png
│ ├── okay.png
│ └── status.gif
├── index.html
├── registration.html
└── thanks.html

This is my nginx.conf:

user http;
worker_processes 1;

events {
worker_connections 1024;
}

http {
server {
listen 80;
server_name localhost;

    location / {
        root /srv/www;
        index index.html;
    }
}

}

Now here is where I am stuck and what I think nginx is doing according
to my nginx.conf.

  1. The root directive maps request to localhost/ to the local
    directory /srv/www in the filesystem and serves up index.html

  2. But when I access localhost/registration.html, the html file loads
    OK, but the corresponding registration.css fails to take effect. When
    I checked it in chrome inspector, the GET request is getting a 304 Not
    Modified (even in incognito mode) or a 200 OK (from cache)

What am I doing wrong?

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