The translation of Isa. 45:7 from the Hebrew reads in the Interlinear as:
"I form the light, and create darkness, I make peace, and create calamity - I Yahweh do all [these] things."
The word that is translated in the KJV and YLT, and several English versions as "evil" is Strong's Heb 7451 "ra'". The English definition is adversity; bad, evil. The grammatical use as an adjective is "evil", but as a noun which is the part used in the Isa. 45:7 it includes "distress, misery, adversity, calamity". Source: BDB at Biblehub.
The AMP has "causing peace and creating disaster". The CEB has "make prosperity and create doom". The CJB has it as "I make well-being; I create woe". These are better translations of the context and meaning of Isa. 45:7.
The context of the Isa. ch. 45 (continuing from Isa. 44:28) is of the chosen king Cyrus, approx. 150 years before Cyrus came to throne of Persia. Isaiah prophesied during the reigns of Uzziah, Jotham, Ahaz, and Hezekiah during the latter part of the eighth century BC from about 740 to 701 BC. (1)
Throughout this chapter God was making Himself known to Cyrus before Cyrus was even born. As Daniel prospered in the captivity under Darius and Cyrus (Dan. 6:28), it is most likely that Daniel related Isaiah's prophesy to Cyrus. Josephus believed this was so in his "Antiquities of the Jews" XI.1.2. (2)
So, Isa. 45:7 means that YHWH is the only God, and that He alone is the author of light and darkness, of peace and of adversity. He raises up kings and nations, and he throws them down (Psa. 52:5) .
"But the Lord is the true God; he is the living God and the everlasting King. At his wrath the earth quakes, and the nations cannot endure his indignation." (Jer. 10:10, RSV)
"13 Son of man, when the land sinneth against me by trespassing grievously, then will I stretch out mine hand upon it, and will break the staff of the bread thereof, and will send famine upon it, and will cut off man and beast from it:
14 Though these three men, Noah, Daniel, and Job, were in it, they should deliver but their own souls by their righteousness, saith the Lord God.
15 If I cause noisome beasts to pass through the land, and they spoil it, so that it be desolate, that no man may pass through because of the beasts:
16 Though these three men were in it, as I live, saith the Lord God, they shall deliver neither sons nor daughters; they only shall be delivered, but the land shall be desolate." (Ezek. 14:13-16, KJV)
The evil, or adversity that God creates are the judgments against the nations, and against people who sin; who turn to pagan idols, and turn away from Him.
"17 But if they will not obey, I will utterly pluck up and destroy that nation, saith the Lord." (Jer. 12:17, KJV)
1) "Cyrus the Great in Biblical Prophesy", by Wayne Jackson at ChristianCourier.com
2) Antiquities of the Jews, Josephus here