Unable to create directory Error in WordPress

Fix #1: Update/Change the Uploads Directory Settings

1. Log into your WordPress admin dashboard
2. Go to Media Settings menu (Settings -> Media)
3. Enter wp-content/uploads in the “Store uploads in this folder” text box
4. Save the changes by hitting the “Save Changes” button and you are done

Fix #2: Manually Change the Folder Permission

1. Change folder permissions on the wp-content directory to 775 and try the upload again
2. If it fails, change the permissions to 777 and try again
3. if it still fails then do step 1 and 2 for the “wp-content/uploads” directory too