Sometimes you are not able to install gapps or other zips from TWRP due to small size of system image.
Here are the steps to increase/decrease the system image size
1. Boot to TWRP and connect your phone through usb cable.
2. unmount system from TWRP
3. commands to execute:
e2fsck -f /dev/block/by-name/system
resize2fs /dev/block/by-name/system 4G (Increasing size of system image size to 4gb, you can use any number you want, for example 2500M for 2500mb)
4. Mount the system in TWRP , now you have 4gb system image. check it by:
5. Try installing the gapps or zip again. Done