One should always use environment variables to differentiate between development and production environments. I keep a config file to define various variables, connection strings etc. If the variables are set in environment I utilize them otherwise I use the default values meant for local usage . For example, a connection URL in config file may be initialized as following :

connection = process.env.connectionString || localConnectionString

In development mode connection will point to localConnectionString while in production mode it'll be initialized with process.env.connectionString. In fact if you use PaaS solutions like OpenShift, Heroku etc you are expected to follow these standards.

Env vars are used very much.

Other approach is: Having config.yaml (or any format) file which has constants eg. connection_url, db_hosts etc. And this file is not committed in repo. For dev/local purposes have a configs.yaml.sample file with defaults settings.