We present the microfabrication and initial testing of an AFM-tip like device, or nanotorch, that is capable of generating a very localized microplasma at its tip. The submicron region near its tip provides a unique manufacturing environment where new methods for controlled direct-write micro and nanofabrication can be tested. The device has been fabricated using both surface and bulk micromaching techniques. We demonstrated both localized submicrometer oxidazion patterning and imaging with the same device. Preliminary experiments have also been carried out demonstrating localized plasma etching of a polymer surface at atmospheric conditions with an AC voltage of 1000V.