How to do full factory reset on 5th gen iPod

I need to do a full factory reset on my 5th gen iPod, however when I hook it to iTunes and go to reset it throws up for my password (PW) with my user name instead of email and it won't accept my PW which works fine on iTunes and iPhone, is it a different PW for my iPod? Also on the 5th gen it only gives you an option to reset not remove and reset so when I reset all my music, vids and pics are still on it. I'm trying to do a full reset so I can sell my iPod which I haven't used in over 3 years. Can anyone tell me how to either get a full reset with files removed without hooking it to iTunes or is there a way to get reset on PW as it doesn't throw up anything for resetting it even tho it won't accept my active PW. Thanks for any help.