Hi,

Thank you for reaching out to our team and for the included details.

Regarding the error, the Google Ads API may not have been enabled yet. You may 
resolve this by enabling the said API in your Cloud Project, and you may refer 
to this guide as to how.

After enabling, there should be no other implications (for the AdWords API) 
except that the error should no longer be occurring. As for the other two items 
:

Do we create test projects using the same developer token and use that Oauth 
credential for our dev setup ?

Your current OAuth2 credentials that you have used with your current developer 
token can be used for your dev or production setup and API calls.

Do we require to create both a new developer token and a test project for our 
testing purpose

You can use your existing developer token and then create a test account and a 
separate set of Cloud Project and OAuth2 credentials, using the user / email 
address associated to the test account, if you wish to first test out the API's 
services and features.

Let me know if this helps.

Best regards,

Peter Laurence Napa Oliquino
Google Ads API Team
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