Personnally, I'd stay away from copying over dlls to my system folder, unless it's done by an installer.
You mentioned you had copied your dlls into the Lazarus folder - you might also need to copy the dll to the project output folder (the folder where your application executable is located), so you can run the application.
You mention you can't get a connection - what errors do you get? A timeout? Have you set the host, username, password properties for the Postgres connector?