I have a playbook that is supposed to create a config file for all specified hosts, on my monitoring_sever.

- hosts: all
  gather_facts: True

  hosts: monitoring_server
  tasks:
  - command: touch {{ hostvars[item]['ansible_fqdn'] }}
    with_items: "{{ groups['all'] }}"

I execute the playbook with ansible-playbook main.yml -l "new_client, new_client2, monitoring_server"

The Resulting files on the monitoring server should look like the following:
client1.conf client2.conf

But I get an error about missing quotes, I've tried all sorts of syntax changes but I can't seem to find the problem.

Updated:

- hosts: all
  gather_facts: True

  tasks:
    - file:
        path: "{{ hostvars[item]['ansible_fqdn'] }}"
        state: touch
      delegate_to: host_name # Delegate task to specific host
      with_items: "{{ groups['all'] }}"

You have typos in your original playbook.

1. with:items should be with_items
2. items should be item

Usage of delegate_to: http://docs.ansible.com/ansible/playbooks_delegation.html#delegation

As long as you are targeting all hosts, you don't have to make a loop as Ansible executes tasks on all targeted hosts unless excluded by condition.

On the other hand, I would suggest using file module instead of command to touch the file.

- hosts: all
  tasks:
    - name: Touch a file
      file:
        path: "{{ ansible_fqdn }}"
        state: touch

PS. I assumed ansible_fqdn is a host var you defined for each host.