This is a very interesting question. After all, fashion is all around us all the time, yet when asked how to define it, many people would undoubtedly have difficulties in doing so.
First of all, let's look at finding a good definition for fashion. You might want define fashion by explaining that fashion is a way of clothing or style, which is deemed to be socially acceptable and desirable at a certain point in time. This means that something might well have been fashionable a few years ago, but this does not mean that is is still fashionable now, if it is not any longer acceptable or desirable.
With regard to what constitutes fashion, you might want to elaborate on the fact that there are many different aspects to fashion. You could mention clothes, accessories, hairstyles, shoes, makeup, or handbags, for example.
Lastly, in order to help you understand who or what creates fashion, I would like to point out to you that there are two different aspects that need mentioning here.
Firstly, there is the aspect of physically creating fashion. In this sense, you might want to elaborate that designers typically design clothes, which then get made into actual items in various production establishments, such as clothing factories, for example. Sometimes, items of fashion are produced locally. However, big fashion brands usually have their fashion produced in different countries, as often production cost and labor is cheaper in certain countries compared to others.
The other aspect of creating fashion is the importance of making these items fashionable. Just because a designer has designed and produced an item of clothing, for example, does not mean that this is straight away considered to be fashion. In order to become fashion, it is important that items undergo marketing and advertisement. A trend needs to be established in order to make the item popular and desirable. However, it is also possible that an item can start a new trend itself, provided it is sufficiently successful. In that case, something that hadn't been considered fashionable so far could suddenly become fashionable after all.