When you delete data, it’s no longer accessible through the iPod touch interface, but it isn’t erased from iPod touch. To remove all of your content and settings, erase iPod touch. If you want to save your content and settings, back them up to iCloud or back them up using iTunes before erasing iPod touch.
Important: Erase iPod touch before you sell or give it away. If you previously turned on Find My iPod touch, Activation Lock is removed when you erase iPod touch, making it ready for a new owner. For more information, see the Apple Support article What to do before selling or giving away your iPhone, iPad, or iPod touch.
Erase all content and settings from iPod touch. Go to Settings > General > Reset, then tap Erase All Content and Settings. (If you’re asked to enter your passcode or Apple ID password and you’ve forgotten either, see Forgot your Apple ID, iPod touch passcode, or iCloud Security Code? )
After iPod touch restarts, follow the setup assistant to either set up iPod touch as new or restore it from an iCloud or iTunes backup.