First add the following to your Nginx configuration file:

location / {
  auth_basic            "Restricted";
  auth_basic_user_file  /etc/nginx/htpasswd;
}

Then create the htpasswd file:

# this be passwords
thisbetheusername:thisbeencryptedpass:yercomment

To generate a htpasswd password without installing Apache you can use the following Perl or Ruby code:

Perl

perl -le 'print crypt("password", "salt")'

Ruby (run in irb)

"password".crypt("salt")

The crypt() method uses 56-bit DES encryption, which is used in /etc/passwd and htpasswd.