If you want it 'as-shipped' so a new owner can start over... for lesser Nano, you can totally
wipe it by using iTunes in a computer, a PC or Mac. ~ All of Your content will be gone, too.
This may be way over the head of a more basic Nano:
What to do before selling or giving away your iPhone, iPad, or iPod touch - Apple Support
There may be another Support article that could be more exacting to your issue.
My old iPod wasn't sophisticated enough to warrant any of these fancy re-sets.
The person I gave it to, was easily able to erase all contents they didn't want by
using iTunes in their PC. (Some re-sets are more invasive than others; the iPod
is essentially an external storage, with a lower-level OS installed.)
You could try another angle, or check details in the instructions to see if different
steps may be required for different versions of iPod Nano (generations aside.)
So far the idea to use iTunes from a computer seems to be the most suggested.
Additional iPod Nano info, for earlier and more recent, see these:
•iPod Nano - 1st & 2nd Generation Support:
https://www.apple.com/support/ipodnano/earlier/
•iPod nano - Official Apple Support
support.apple.com/ipod/ipod-nano
Good luck & happy trails! 🙂