Fix: Cannot connect to the Docker daemon. Is the docker daemon running on this host?

First, you need to of course make sure your docker service is running:

sudo service docker status

You may need to add your current user to docker group, for example suppose you're logged in as ec2-user:

sudo usermod -aG docker ec2-user

You need to log out and log in again for it to take effect.
You can verify it by:

id ec2-user