Issue on a windows laptop that was causing the `db:create`  command to fail with the above error message.

Initial ways to try solve the issue involved restarting the Postgres database with: 

sudo service postgresql restart

This did not work. The solution which worked in our case was to update the wsl to version 2:

wsl --set-version Ubuntu-22.04 2

This command needs to be run in the ubuntu terminal.

Once this was updated everything was able to run without errors