How to create a password protected ad-hoc network on Yosemite when not connected to the internet This is a more precise reframing of questions No secure ad-hoc network with Yosemite? (my use case) and How to create a password protected ad-hoc network on Yosemite (not applicable here).

Background info: With Yosemite (Mac OS 10.10) Apple removed the option to setup a password protected ad-hoc network. However, Internet Sharing allows to setup a secure network to share an internet connection from another network interface.

Now, the problem is that the Internet Sharing network does not work for my use case, since it fails to start up when there is no internet connection to share. Peeking in the console reveals this message:

  configd[50]: no interface for external service id


This means, there seems to be no longer a possibility to quickly but securely connect two devices without bringing an external router, unless someone knows a trick or pointers how to configure the Software Base Station, or dive deep down into network config, maybe using ifconfig, natd, ipfw like here: https://blog.netnerds.net/2012/07/os-x-how-to-setup-nat-on-lion-and-mountain-lion/
I'd been looking a long time for this answer as well to be able to play games on a  local network.
Since awhile (for some annoying reason) Apple only allows an active network to be shared over wifi with a password.
To create your own &quot;active&quot; network, in terminal run the 2 following commands.
# Idk if this is necessary. if you lost your 127.0.0.1, creating this should fix it:
# sudo networksetup -createnetworkservice Loopback lo0
# sudo networksetup -setmanual Loopback 127.0.0.1 255.255.255.255
##
sudo networksetup -createnetworkservice FakeNet lo0
sudo networksetup -setmanual FakeNet 192.168.1.56 255.255.255.255

This creates a new network conection that (although the preferences show it as inactive) can be shared from the internet sharing preference pane to Wifi with a password.
To share the connection,

go system preferences
Then sharing preferences
select FakeNet as the connection to share from
share to wifi
advanced settings allow a password to be set

Source: https://www.laszlopusztai.net/2016/02/14/creating-a-wi-fi-access-point-on-os-x/