How to restore my iPod
You need to put it into DFU mode. See this OS X Daily article for instructions. Basically


Connect the iPhone to your computer and launch iTunes
Turn the iPhone off (hold down the power button at the top of the iPhone)
Hold down the sleep/power button and home button together for exactly 10 seconds, then release the power button
Continue to hold down the Home button until a message appears in iTunes telling you an iPhone in recover mode has been detected


When you are in DFU mode your iPhone screen will be completely black. Even though the screen is black, that doesn’t mean the device can’t be interfaced with either iTunes or a custom firmware client (for jailbreaking, etc).