Is it set to use OAuth2?

Yes. I changed it to auto and that didn't work.

In webmail account accessed via a browser: Have you setup to use 'two-step verification' because you also use a phone to see the server folders and emails? If yes, then you need to get 'an application specific password' and use that as the password when creating the mail account. https://support.google.com/accounts/answer/185833?hl=en

If you have not set up 'two step verification' and do not need it, have you selected the option to use' less secure apps'? If no then select the ' less secure apps' option. https://support.google.com/accounts/answer/6010255?hl=en

In Thunderbird, whilst creating the existing gmail mail account: After clicking on the 'Manual config' button, does the 'User Name' = full email address? Is this pop or imap? If imap select the OAuth2 option. click on 'Done' to create the account.

After setting to use 'less secure apps', did the account get created? gmail using OAuth2 will prompt you to login via a browser to create the OAuth2 password which will be stored in thunderbird.

Thanks for your reply. I do not use 2 step verification for gmail. I am not willing to change my security to allow ' less secure apps'. I guess this won't work for me.

Gmail with OAuth2 works for me in Thunderbird. No need for "less secure apps".

Which version of Thunderbird are you using? Gmail changed their process some months back and Thunderbird had to be tweaked to accommodate their changes. Recent (TB52 and up) versions of Thunderbird will have this fix.

Updated to TB52. this did it!

Thank you!!