Creating user accounts as an administrative user
It's fine to create 2 methods to break up the logic a bit - however, there are other things I'd look into before tackling the user vs admin stuff:

Firstly: Ruby style prescribes 2-spaces indentation - not tabs, not 4 spaces.

Second, if you're going to use them, make those create_by* methods private. Don't mix 'em with the regular controller actions.

Third: String interpolation:

flash[:success] = "User for #{@user.name} created."


But success is an uncommon flash key. You can use the default notice message type directly in your redirect

redirect_to root_url, notice: "User for #{@user.name} created."


If you absolutely want to use success, you can use add_flash_types to add it, and use redirect_to ..., success: '...'.

And then you have this:

render 'new_by_admin' # basically a new.html.erb but with a dropdown for the admin setting


Don't use two templates - that's a giant hassle to maintain. Use a conditional in the view itself to show or not show the dropdown. I'd also add an admin? helper like this

# in application_controller.rb
def admin?
  current_user.try(:admin?)
end
helper_method :admin?


(I'm assuming that current_user is nil if you're not signed in).

So now you can check for admins in one go rather than both check signed_in? and then check current_user.admin? 

In the new view you get this:

&lt;% if admin? %&gt;
  your dropdown
&lt;% end %&gt;


And you don't need to 2 templates. Your if..elsif..else in #create can also become the more readable:

if admin?
  ...
elsif signed_in? # regular user
  ...
else
  ...
end


Your code also makes me wonder how you handle passwords. If an admin creates a user, I imagine you'll want to send login instructions and password to the new user.

Right now, it looks like the admin picks a password for other people, but you should already have a "reset password" method (for users who've forgotten their password) that will create a random password and email it to the user. It shouldn't be the admin's job to make up passwords.