One thing you need to watch out for when you're working with a chip that doesn't have an external clock source is if you select a board from the Tools > Board menu that has its fuses configured for an external clock (as is the case with all the standard ATmega328P based boards), then do Tools > Burn Bootloader, it sets the fuses on your ATmega328P to require the non-existent external clock source, which "bricks" the chip until you can connect an appropriate clock source to it. That causes the sort of error you're seeing.
There are 3rd party hardware packages that provide boards definitions to use the internal oscillator. My preference is:
but note that once the fuses are set for external clock, even if you have a board definition for internal oscillator selected it will still require the external clock connected long enough for you to set the fuses.