God didn't "create" evil per se. He was probably mildly amused when one of his angels (Satan, Lucifer, Beelzebub, etc) through his own pride decided to lead the revolt of one third of the angels against Him. Of course, angels are imperfect creatures which were not created by God in His own image, as we are.
We are infinitely more special than the angels, as God created us in His own image. The angels are merely messengers which have been around ever since the creation. They are not afforded the same forgiveness that we are.
It was in the Garden of Eden that Satan temped Eve and subsequently Adam, into going against God's wishes. For that, there will never be forgiveness, nor will there ever be forgiveness for the one third of those angels who followed Satan.
But God loved us so much that he didn't want us to perish, therefore He gave us ten commandments to follow, in order to remain in His favor. Unfortunately, many people failed to observe them. So at some point, God brought upon the world the Great Flood.
Even after the flood, silly humans refused to observe God's laws and rules as written in the Old testament. In order to give His creation a way out of sin and eternal damnation, He sent His only begotten son to die upon the cross, thereby having all of the world's sin placed upon Him.
Whether God allowed the temptation in the Garden or he lost control of his angels could be debated by the non-believers. I prefer to believe that He planned all this from the start, to impress upon us what a mighty Creator He is, because the idea of God being imperfect or out of control is kinda silly.