tar command to extract archive with colon in the name

Try --force-local option:

tar -zxvf plugin:xyz.tgz --force-local

From info pages

If you need to use a file whose name includes a colon, then the remote tape drive behavior can be inhibited by using the `--force-local' option.

the answer by @csg is spot on.

Another alternative, however, is specifying a path to the archive instead of its filename. This can either be an absolute path, or more simply a path relative to the current directory:

tar -zxvf ./plugin:xyz.tgz

this will force tar to interpret the name as a local file.