5th generation iPod touch lock screen suddenly does not function/ or respond to touch?

Recently, I was using my iPod touch to take a picture of the beach, while I was at the beach. It functioned perfectly well, but afterwards the lock screen did not respond to touch. It is 100% battery at the moment. Though my hands were just a tiny bit wet at the time, I do not believe the issue is hardware related. I also do not believe this is related to the fact that my hands were wet while using the device. This is because when I swipe down to open my notification on the lock screen, it responds to my touch. Although I cannot access any of the apps on notification center, and it will not respond when I click on notifications, the software does allow me to open notification center.

I cannot slide to unlock my iPod touch, all of a sudden. Also, I cannot open the camera app via the lock screen either. When a friend texted me (through iMessage), a notification showed up on the lock screen. The only action the lock screen allows me to do is access the notification center.

Also, when connected to my Mac and wall charger, it will charge. I am currently operating on iOS 7.1.1, so I have been due for a software update.

Would updating through my iMac solve this problem? Also I plan on backing up all the data onto my computer (esp. photos). How should I solve this problem? If I were to upgrade to iOS 7.1.2 would it be helpful? I believe this is merely a software issue, not a hardware issue with the touch screen. I have had this iPod touch since February 2013 and it has a 32 GB capacity.

Thanks to everyone who answers 🙂

p.s. Has a similar issue like this ever occurred to anyone?