According to Wikipedia, the T'au were created by Gav Thorpe:
Gavin Thorpe began developing what eventually became the Tau in the early 1990s. Initially, he conceived them as the counterpart to the Lizardmen faction from Warhammer Fantasy, in the same way the Eldar are the counterpart of the High Elves, and he called them "the Shishell". Like the Lizardmen, the Shishell had a caste-based society. The Shishell had five castes: Earth, Air, Fire, Water, and Spirit. The race was ruled by a caste of psykers. In 1999, Thorpe revisited his Shishell concept when Games Workshop asked him to develop a new army. The caste system became part of the new Tau race. The Spirit caste was renamed "Ethereal", and the Ethereals became non-psychic so as to differentiate them from the Eldar Seer councils.
From the Wikipedia article on the T'au Empire
Checking Gav Thorpe's website, I found an article about the Origins of the Tau
As I’ve mentioned in some interviews, the genesis of the T’au philosophy and society pre-dates my employment at Games Workshop (and their official inception) by about a decade. Inspired by the Eldar article in White Dwarf 127 as an impressionable teen I embarked upon a personal project to emulate that wonderfulness, complete with Jes Goodwin-alike concept sketches, background and army list.
The species I invented were called the Shishell (or more specifically the Shissellian League) and were Lizardmen In Space, like Eldar were Elves In Space. The visuals were nothing like the T’au ended up, but a fundamental part of the background I created was the idea that their society was based around five castes – Earth, Air, Fire and Water, and a fifth called Spirit. The Shishell had psykers ruling over them, whereas the T’au most definitely do not.
And with them were the Tao (later Tau, now T’au) based on the underlying concept of the five elements I had originally come up with for the Shishell. I had kept my hand-typed reams of background and pencil sketches and persuaded the rest of the team that it was worth a punt, marrying some of the background to the idea of a more modern army, mecha-themed force (as opposed to the far more organic anime influence in the Eldar designs).
There are rumours that the T'au were created or supported by the Eldar, kind of what the Old Ones did with the Eldar. This due to their very low warp signature (in order to avoid Chaos to corrupt them) or, as FuzzyBoots mentioned, the Ethereals suddenly appearing and guiding them. This has however never been confirmed or denied by GW or an affiliated person.