I encountered this error using MySQL in a different context (not within phpMyAdmin). GRANT and SET PASSWORD commands failed on a particular existing user, who was listed in the mysql.user table. In my case, it was fixed by running
FLUSH PRIVILEGES;
The documentation for this command says
Reloads the privileges from the grant tables in the mysql database.
The server caches information in memory as a result of GRANT and CREATE USER statements.
This memory is not released by the corresponding REVOKE and DROP USER statements, so for
a server that executes many instances of the statements that cause caching, there will be
an increase in memory use. This cached memory can be freed with FLUSH PRIVILEGES.
Apparently the user table cache had reached an inconsistent state, causing this weird error message. More information is available here.