You’re seeing that error because you tried to install the theme via the Plugins section of the WordPress admin.
To install a theme log in to the WordPress admin and go to Appearance > Themes.
Click “Add New” and then “Upload Theme” and select the zip file you downloaded. Then click “Install Now”.
Once it has installed go to the Themes section, hover over the newly installed theme and click “Activate” and that’s all there is to it.
If you go to Appearance > Customize you will find various settings that will allow you to customize your site.