You must reach level 30 before you can create a League. Go to the Embassy and open the "My League" tab, enter a unique name for your League, and design a logo with the help of the logo generator.
You can send other players invitations to join your League via the Friends list or by going to your Friend's Castle and clicking "Invite" on the Actions menu.
You can cancel sent invitations in the "Invitations" tab of your League.
You can accept or decline the requests to join your League in the "Applicants" tab of your League.