F.A.Q.
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Mac OS X
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xterm-color error using Terminal.app
By default, Mac’s Terminal.app application declares itself to be of terminal type “xterm-color”. You can change this by changing Terminal.app’s default.
Go to Terminal’s Preferences

Change “xterm-color” to “xterm”.

Alternatively, one can change their terminal type from the command line by typing:
setenv TERM xterm
(if that doesn’t work, try export TERM=xterm)