First you need install chmlib, get it from: 

http://66.93.236.84/~jedwin/projects/chmlib/

Then install python bindings from GnoCHM projects, calles PyCHM:

http://gnochm.sourceforge.net/pychm.html

For installing arCHMage into /usr/local directory run following command:

python setup.py install --prefix=/usr/local