This is an edge case where this error can occur when you have a corrupted NPrinting service account or the service account does not have full administrative privileges on the NPrinting server.
1. Check that the NP service account is a domain account and ensure this account is added to the local administrators group. (Ensure that this account is also not shared with any other server service).
2. Check that it can make changes to the Local Security Policy editor. While in this editor, make sure you can add the NP service account to the local policies/user rights assignment/log on as a service right. (If it cannot make this change then this account does not have full administrative permissions. This can happen with Group Policy limits the behavior of certain accounts). This may also indicate that the account may have also become corrupted and will need to be replaced.