What the !?!

I am trying to set up a new user -- which I did successfully once before
about a month ago -- by following the instructions in the manserver. I
edited the passwd file, then tried to create the home directory for the
newuser, but I can't change ownership because it says the user doesn't
exist. I tried logging in as the newuser, but login fails.

I must be missing a step, but what?

One problem is I do not know how to actually set the newuser's initial
password, I tried nothing and the login ID but neither of those worked. I
assume I don't enter it in the passwd file because the man page says that
is encrypted (yes?)

TIA,

Bob

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