Using window functions in an update statement

The error is from postgres not django. You can rewrite this as:

WITH v_table_name AS
(
    SELECT row_number() over (partition by col2 order by col3) AS rn, primary_key
    FROM table_name
) 
UPDATE table_name set table_name.col1 = v_table_name.rn
FROM v_table_name
WHERE table_name.primary_key = v_table_name.primary_key;  

Or alternatively:

UPDATE table_name set table_name.col1 = v_table_name.rn
FROM  
(
    SELECT row_number() over (partition by col2 order by col3) AS rn, primary_key
    FROM table_name
) AS v_table_name
WHERE table_name.primary_key = v_table_name.primary_key;

This works. Just tested it on postgres-9.6. Here is the syntax for UPDATE (see the optional fromlist).

Hope this helps.