"This message can appear before, during, or after a system update has started.
Thereafter, under the “Queue” section of ‘My games & apps’, note the download speed shown on the game or app that is being installed. If you notice slow speeds, it may take some time to download the game.
Solution Hopefully, you don't need to resort to Step 7, but it seems that this is a common problem.
Microsoft's support forums are littered with posts of people claiming problems with the Xbox One update.
Update #4 (am ET): This is anecdotal, but my Xbox One has updated after around three hours of trying.
The update finally initiated like normal, and I’ve been able to update games. Update #3 (am ET): Still no official update, but the Xbox Support team running the support Twitter account is at least aware that users are having issues.