What is 'Create'?
All creations, start from one thing, an idea. This is why I chose a light bulb to illustrate my understanding of 'create'. It is through this idea, you can make something out of nothing.
What is 'Design'?
Design to me is something you make for a specific reason with an emphasis on form, function and aesthetics. Referring to the image above, the idea is to make a Christmas card. If you create a birthday card, you could just write 'Merry Christmas' on a card. But if you design a birthday card, then, it becomes something aesthetically pleasing that serves its function.
References
Cambridge University Press 2013, Cambridge Dictionaries Online, viewed 12 April 2013, <http://dictionary.cambridge.org/dictionary/british/design_1?q=design>