REBOL 3 - What does the error "word is not bound to a context" mean?

REBOL 3 - What does the error "word is not bound to a context" mean?

In experimenting with words in Rebol 3, I ran into the following error.
>> set to-lit-word "g" 4
** Script error: 'g word is not bound to a context
** Where: set
** Near: set to-lit-word "g" 4
This seems pretty tricky because of the following results:
>> to-lit-word "g"
== 'g
>> set 'g 4
== 4
I was wondering how a word cannot be bound to a context when it looks
identical to the above...