How do I create a partition for my Maxtor One Touch external harddrive

It looks as if your drive has failed, no doubt the warranty has also expired, but check anyway.
There is a small chance that the fault lies with a connection or cable and the drive itself is ok.
You would need to remove it from the case and connect it internaly if it's a desktop pc, or if it's a laptop get a powered adptor or another case to connect it via usb.
Here is an article you can read about partitions, I won't duplicate web content: http://en.wikipedia.org/wiki/Disk_partitioning