ORA-28154: Proxy user may not act as client 'string'
Cause : A proxy user may not assume the identity of a privileged user in order to limit the privileges that a proxy may possess.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Execute the statement again specify a client other than a privileged user.
Well, the reason for above error is that i have taken the above script from a 11g database and running it on 10g database. 11g has bring some changes in password management. Below code is executed on 11g and user created successfully, which is expected result.