I think generically changing 'iterable' to 'iterable/unpackable' is wrong and would engender more confusion than at present.  Most uses of iteration have nothing to do with multiple assignment target unpacking.  Some minimal examples resulting in "TypeError: 'int' object is not iterable", where this change would be wrong, include

iter(1)
sorted(1)
for _ in 1: pass

What might be reasonable is to wrap iter(source) in multiple assignment target code with (the C equivalent, if it exists, of) try-except and augment the message before re-raising.  The addition could be something explicit like "and cannot be the source for multiple target assignment".

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Camion, Steven gave you excellent advice about playing around with simplified code.  If you had split the multiple-operation error raising line,

for term, dgts in terms_generator(expected_precision):

into two simpler lines that each do less,

for value in terms_generator(expected_precision):
    term, dgts = value

you would have likely have spent much less time looking in the wrong place.  Isolating possible exception sources is a very useful debugging tool.