There are many ways to create threads, but the most common way for a maker is the use of taps and dies.

To create a threaded hole, a hole is drilled in the material of a size slightly smaller than the finished hole size. A tap is then placed in the hole and holding it straight to the hole, rotated it clockwise. This will pull the tap into the material and start to cut a thread. As the tap is rotated it is pulled further into the material and cuts the thread further down the hole.

As you rotate the tap in the hole it will pull it's self in and remove material. For every full turn the tap should be wound back a half turn. This helps clear the material being removed by the tap. When tapping, a cutting fluid should be used. This helps keep the tool and the material you are threading cool. It also lubricates the tap in the hole. This eases the use of the tap and keeps the tap sharp.

Notes:- If tapping a hole that goes through a piece of material you can use a simple standard tap. A standard tap is tapered, so as it cuts further down into the hole, and it also cuts deeper into the side of the hole until the thread is of the correct size. BUT if you wish to tap a blind hole, a hole that does not go all the way through you material you will need a bottoming tap. This is much the same as a normal tap but the threaded part is much shorter and cuts the correct size with a very short taper. This means you can complete the thread without the tapered end of the tap hitting the bottom of the hole before it cuts the full thread.