Whenever $G$ is finite and its automorphismus is cyclic we can already conclude that $G$ is cyclic.
Because as we already saw $G$ is abelian and finite, we can use the fundamental theorem of finitely generated abelian groups and say that wlog
$G=\mathbb{Z}/p^k\mathbb{Z} \times \mathbb{Z}/p^j \mathbb{Z}$. But the automorphismgroup isn't abelian and hence isn't cyclic.
For non finite groups the implication isn't true.
The following is from this link and only slightly reworded.
Let $G$ be the subgroup of the additive group of rational numbers comprising those rational numbers that, when written in reduced form, have denominators that are square-free numbers, i.e., there is no prime number $p$ for which $p^2$ divides the denominator.
Then:
The only non-identity automorphism of is the negation map, so the automorphism group is $\mathbb{Z}/2\mathbb{Z}$, and is hence cyclic.
The group $G$ is not a cyclic group. In fact, it is not even a finitely generated group because any finite subset of can only cover finitely many primes in their denominators. It is, however, a locally cyclic group: any finitely generated subgroup is cyclic.
$G/H=\{gH: g\in G\}$ by definition. this is only a group under $(gH)(g'H) = (gg')H$ if $Hg' = g'H$. But this is just another way of stating the definition of $H$ being normal. In your proof you just neglected to note that $xyx^{-1}y^{-1}H$ is only relevant because it is equal to $(xH)(yH)(x^{-1}H)(y^{-1}H)$ because $H$ is normal.
I would call this "incomplete" rather than "wrong" if anything, as the problem is a few steps beyond reproving the basic fact that $G/H$ is only a group when $H$ is normal. I think you just forgot that that's what makes $G/H$'s group operation well-defined.
Best Answer
The fact is that in general the question is false, but if one add the hypothesis, that the group $G$ is nilpotent (e.g. a $p$-group for some prime $p$), then the result become true:
Indeed, we have the chain $\gamma_{3}(G)\subset \gamma_{2}(G)\subset G$, where $\gamma_{2}(G)= G'$ and $\gamma_{3}(G)=[\gamma_{2}(G), G]$ (the commutator). Now from the last relation we have $\frac{\gamma_{2}(G)}{\gamma_{3}(G)}=Z( \frac{G}{\gamma_{3}(G)} ) $ (the center); so the quotient $\frac{\frac{G}{\gamma_{3}(G)}}{Z( \frac{G}{\gamma_{3}(G)} ) }=\frac{G}{\gamma_{2}(G)}$ and this is cyclic, and as someone have remarked above, this implies that $\frac{G}{\gamma_{3}(G)}$ is abelian and then $G'=\gamma_{2}(G)\subset \gamma_{3}(G)$ and finally $\gamma_{2}(G)= \gamma_{3}(G)$. Since $\gamma_{3}(G)=[\gamma_{2}(G),G]=[\gamma_{3}(G),G]=\gamma_{4}(G)$ and so on... But in last we know that $G$ is nilpotent and so there is a $c \in \mathbb{N}^{+}$ such that $\gamma_{c}(G)=1$ and so $G'=1$ that means $G$ is abelian.
For the general case one can see to the alternating group $A_{4}$: indeed one can prove that $|A_{4}|=12$, $|A'_{4}|=4$ so that the quotient $\frac{A_{4}}{A'_{4}}$ has 3 element and it is cyclic; but $A_{4}$ is not abelian.