Simply follow the Standalone instructions at
Running Webgoat - Standalone instructions
NB it is better to start WebGoat from the command line, and not by double-clicking the jar, because on the command line you can see if WebGoat fails to start or crashes for some reason.
(Local copy of webgoat-container-7.1-war-exec.jar, in case website above is slow.)
There is a bug in WebGoat 7.0.1; the jar above has been updated to 7.1. If you used 7.0.1 earlier you have to clear your browser cache and remove cookies before it works.
The WebGoat has a Java Source tab, where you can see the Java source of the web application, but you can ignore that, as we won't be looking at the code behind the website.