The specified user domain\username could not be found. Some or all identity references could not be translated.

​It can be frustrating when you are sure an account exists in Active Directory and you can't create a managed account for some reason. There are two likely reasons: you miss-typed the username, or you forgot to prefix the username with the domain. That probably accounts for 90% of cases, but there are a couple of others, so if you have already checked the spelling, read on:

For some reason, the username that is picked up when creating the managed account is the "User logon name (pre-Windows 2000)" that you see when you create the user or in the Accounts tab on the Properties page for the user in Active Directory Users and Computers. Normally this would be the same as the User Logon Name and the Display Name. However you can set these independently, so that is the first thing to watch for, particularly if you changed the user name at some point after it was created.

Another gotcha is that if you enter a username that is longer than 20 characters, you will notice that the legacy pre-Windows 2000 username is truncated to the first 20 characters. Again, that truncated name is the one that is used when you create a managed account. Probably the best plan is to just avoid using names longer than 20 characters, otherwise it gets too confusing.