I have updated my ipod with ios7.1 and it then tells me my password is wrong I have changed it as it disabled me and it still keeps saying it is wrong

Disabled

Place the iOS device in Recovery Mode and then connect to your computer and restore via iTunes. The iPod will be erased.

iOS: Wrong passcode results in red disabled screen

If recovery mode does not work try DFU mode.

How to put iPod touch / iPhone into DFU mode « Karthik's scribblings

For how to restore:

iTunes: Restoring iOS software

To restore from backup see:

iOS: Back up and restore your iOS device with iCloud or iTunes

If you restore from iCloud backup the apps will be automatically downloaded. If you restore from iTunes backup the apps and music have to be in the iTunes library since synced media like apps and music are not included in the backup of the iOS device that iTunes makes.

You can redownload most iTunes purchases by:

Downloading past purchases from the App Store, iBookstore, and iTunes Store

If problem what happens or does not happen and when in the instructions? When you successfully get the iPod in recovery mode and connect to computer iTunes should say it found an iPod in recovery mode.

If yo mean Apple ID password then

First

How do I change or recover a forgotten Apple ID Password?

If you've forgotten your Apple ID Password or want to change it, go to My Apple ID and follow the instructions. SeeChanging your Apple ID password if you'd like more information.

If not successful contact iTunes by:

Contact iTunes