How do I restore deleted files in Eclipse with local history?

To restore a deleted file, right-click on your project folder and select Restore from Local History from the context-menu.

This opens a dialog box where you can select what exactly I want to restore:
Figure 1. Restore from Local History Dialog Box

Restore from Local History Dialog Box

Note: The Local History is not only useful to restore files, it can also restore any changes or edits in a resource.
Note: The local history is stored based on the project, and the Restore operation needs to be performed on the project folder. So if you delete your project by using the Delete project contents on the disk(cannot be undone) option. In such case your project is permanently deleted, and you cannot recover it using the Restore from Local History option.