Will using my iPad with slightly damp hands like after washing your hands or picking up a soda can with condensation on the outside damage my iPad with liquid damage and how would you know if your iPad is liquid damaged if it functions normally?

It shouldn't hurt, but if your hands/fingers aren’t quite dry enough, as Idris Seabright has stated, touch sensitivity on the screen doesn't work as well.

Also, you may want to better dry your hands and fingers to prevent any water/moisture from entering the iPad from around the Home button, which is not sealed up/waterproofed, from along its very outer edge/recess of the button.

looks pretty safe

Environmental Requirements

• Operating ambient temperature: 32° to 95° F (0° to 35° C)
• Nonoperating temperature: –4° to 113° F (–20° to 45° C)
• Relative humidity: 5% to 95% noncondensing

iPad 9.7-inch - Technical Specifications - Apple

Drying your hands is a good idea. Wet fingers don't work as well on a touch screen.