Octave does not plot

When I try to plot a graph on GNU Octave, and try to use plot, it gives me the following output

set terminal aqua enhanced title "Figure 1" size 560 420  font "*,6" dashlength 1
                  ^
     line 0: unknown or ambiguous terminal type; type just 'set terminal' for a list

I am using Mac OS X 10.9.2. I have tried using

octave:79> setenv("GNUTERM","X11")

but I still get the same error.

setenv("GNUTERM","qt") in your octave command prompt, it should solve the problem.

I think your problem comes from using the CLI.

As of January 2, 2014. If you're using OS/X 10.9 (Maverics) then you can opt to use integrated GUI from the binary package by downloading the Octave 3.8.0 .dmg. Use Octave-gui not Octave-cli, or otherwise start the GUI from the CLI.

A note about the gui from The Octave Home Page

But because it is not quite as polished as we would like, we have decided to wait until the 4.0.x release series before making the GUI the default interface (until then, you can use the --force-gui option to start the GUI).