Can you verify that you have manager access? The command show session-list would show you the access level.
Could it be that you have command authorization enabled and blocking the password command from your TACACS server?
What software version are you running?
The same command works fine for me on my 2930F (version 16.10.0009):
sw01(config)# password operator user-name test
New password for operator: ********
Re-enter the new password for operator: ********
You may reach out to support if these steps don't resolve your issue. Please post if you resolved the issue for others to learn.