As a newly minted SharePoint administrator, I have come across the error above several times when creating new web apps and managed metadata service apps. Check out this post by Fabian Williams: Error Resoltuion – The default termstore for this site cannot be identified.
Basically, you come up with this error when you want to create a Local term set (which IMO is better than Choice fields for a variety of reasons) and you haven’t configured your Service app properly. Props to Fabian on bailing me out on this one.
