You have just about everything right, the ref+- are the command signal from the Galil, the encoder does go back direct (via the ICM).
The DC power source should go to the two marked Power+ and power GND.
Do NOT take the DC power direct to the servo.
The servo is fed as you say from the + Motor - Motor.
AMC also have the whole hook up on their Engineering Notes site.
Once hooked up, you should be able to control the servo with the DOS or Window DOSterm or Talk2bus programs from Galil.