Microsoft Dynamics CRM Windows PowerShell snap-in is an excellent automation tool but on some Internet Facing Deployments even an innocuous call to Get-CrmServer can fail with a fairly generic message “The caller was not authenticated by the service“. One of the possible reasons is that the tool always runs on CRM server but for IFD purposes CRM URL has been reconfigured and instead of crmserver it’s now known as internalcrm.contoso.com.

You are potentially hitting the problem when locally hosted sites cannot be accessed using FQDN. The workaround includes adding some registry entries to cover internalcrm.contoso.com, and that seems to fix authentication in PowerShell.