Isaiah 45:7 - I form the light, and create darkness: I make peace, and create evil: I the LORD do all these things.
Question. What is the meaning of "The LORD...creates evil" in this verse? Does God causes people to sin, based on this verse?
In this verse "evil" is set in contrast to "peace" rather than in contrast to "good". There is no problem with the word "evil" but with the connotation we put on it. We tend to "read into" biblical words the most common way we use it in our speech or writing, without comparing the full semantic range of meaning (and the context). Words gain meaning from their context. "Evil" is the most common way that the Hebrew word "rah" is translated in English (at least in the KJV & NASB) and it is used several times in Isaiah -- some times that speak of immorality or wickedness and some that speak of distress, calamity -- something "bad" happening. Isaiah 47:11, in its context, is a good example of how God brings evil, mischief and desolation upon Babylon in judgment. This evil is something that brings sorrow, distress, or calamity. It stands opposite to "peace" in this verse in Isaiah. It fits the context of God's judgment described in Isaiah 45. Peace is not inherently always a moral good, and evil in the sense of moral evil is not under consideration in Isaiah's statement.
Adapting to our modern sensibilities, some, if not most, modern translations have adopted the words like "calamity" or "disaster" in place of evil. "Evil" is a better translation -- properly understood, it better encompasses the totality of all the things that are the opposite of peace.
We must understand that God is the sole ultimate cause of everything. I don't see any way that a Bible believer can avoid that conclusion. First there was nothing but God. Everything that is came from God, even if in a secondary or derivative way. God the creator is the first cause of all things, and there is nothing that exists outside his divine governance.