Finally fixed this errow after browsing for a couple of hours and trying many options.
In this block in your Apache httpd.conf file,
(located in my CentOS instance at $ sudo vi /etc/httpd/conf/httpd.conf)
#
# AllowOverride controls what directives may be placed in .htaccess files.
# It can be "All", "None", or any combination of the keywords:
# Options FileInfo AuthConfig Limit
#
AllowOverride None
change AllowOverride None
to AllowOverride All
.