You need to tell catkin_create_pkg which ROS distribution you are using. You can do this in two ways:
1. by explicitely stating it, this is what ther error is telling you. So in your case most probably catkin_create_pkg --rosdistro kinetic your_new_package is what you want.
2. by implicitely deducing from the already sourced workspace. Most tutorials assume you started by sourcing a workspace (either source /opt/ros/kinetic/setup.bash or whereever your workspace lays, most probably something like source ~/catkin_ws/devel/setup.bash).
What you want to do is most probably solution 2, and you forgot to source the workspace in the terminal (you have to do this in every terminal manually, or add it to your ~/.bashrc) you are calling catkin_create_pkg in.