It looks like you're probably on Ubuntu, based on the 'multiverse' reference. If you don't already have rubygems, then you should first do sudo apt-get install rubygems from a terminal. Then you should be able to install rawr with sudo gem install rawr.
The rawr install command is not actually for installing rawr itself. It's one of the commands that you can run with rawr to package your source files.
Also, there might be a .deb package for rawr in Ubuntu's repositories. You can check for one with something like sudo apt-cache search rawr | grep ruby | more or just sudo apt-cache search rawr | more if you don't want to filter for the word "ruby" in package names.