There have been some confusing comments regarding dependence on $x$ or on $c$, so let me try to put it all together.
You are correct that $\delta$ should not depend on $x$. However, when one is proving that $f(x)$ is continuous at $c$, then $\delta$ is allowed to depend on both $\epsilon$ and $c$.
Remember the definition: $f(x)$ is continuous at $c$ if and only for every $\epsilon\gt 0$ there exists a $\delta\gt 0$ such that for all $x$, if $|x-c|\lt \delta$, then $|f(x)-f(c)|\lt \epsilon$.
Notice how the existence of $\delta$ is mentioned before $x$ ever comes into the picture? That's an indication that $\delta$ cannot depend on $x$. On the other hand, both $f(x)$, $\epsilon$, and $c$ occur before $\delta$, which means that, absent any indication to the contrary, $\delta$ is allowed to depend on $f(x)$ (obviously), on $\epsilon$, and on $c$.
So here, you cannot pick $\delta=|xc|\epsilon$, because that would make $\delta$ depend on $x$.
The way to get around it is to get rid of the dependence on $x$. The key here is that since we are trying to make sure everything works if $x$ is "close enough" to $c$, then we will also have that $|x|$ will be very close to $|c|$. So we should be able to to control that division by $x$ in the expression $\frac{|x-c|}{|xc|}$.
How? Well, if a particular $\delta_0$ works, then any smaller one will work as well. So we can always shrink $\delta$ a bit more if needed. Wo the first thing we can note is that we can always require that $\delta$ be smaller than both $1$ and than $\frac{c}{2}$; that is, we will require $\delta\lt\min\{1,\frac{c}{2}\}$. Why $1$? Because then I know that $c-1\lt x \lt c+1$; if $c-1\gt 0$, then this means that $\frac{1}{c+1}\lt \frac{1}{x} \lt \frac{1}{c-1}$, so we can "control" the value of $\frac{1}{x}$. Why less than $\frac{c}{2}$? Just in case $c-1\lt 0$. So let $\mu=\min\{1,\frac{c}{2}\}$. Then we can conclude that $\frac{1}{x}\lt \frac{1}{c-\mu}$. (We could get away with simply putting $\delta\lt\frac{c}{2}$; restricting it to less than $1$ is a common practice, though, which is why I put it here).
So, by requiring that $\delta\lt\min\{1,\frac{c}{2}\}$, we guarantee that $\frac{1}{|x|}\lt \frac{1}{c-\mu}$ (remember that we are working on $(0,\infty)$). What do we gain by this? Well, look:
$$|f(x)-f(c)| = \left|\frac{1}{x}-\frac{1}{c}\right| = \left|\frac{c-x}{xc}\right| = |x-c|\frac{1}{c}\cdot\frac{1}{x} \leq |x-c|\frac{1}{c(c-\mu)}.$$
So if we also ask that $\delta\lt c(c-\mu)\epsilon$, then we have:
$$|f(x)-f(c)|\leq |x-c|\frac{1}{c(c-\mu)} \lt \frac{\delta}{c(c-\mu)} \lt \frac{c(c-\mu)\epsilon}{c(c-\mu)} = \epsilon$$
which is what we want!
So, in summary, what do we need? We need to make sure that $\delta$ is:
- Less than $1$;
- Less than $\frac{c}{2}$; (both of these to ensure $\frac{1}{x}\lt\frac{1}{c-\mu}$);
- Less than $c(c-\mu)\epsilon$, where $\mu=\min\{1,\frac{c}{2}\}$.
So, for instance, we can just let $\delta = \frac{1}{2}\min(1,\frac{c}{2},c(c-\mu)\epsilon)$, where $\mu=\min\{1,\frac{c}{2}\}$.
In general, if you can let your $\delta$ depend only on $f(x)$ and on $\epsilon$ but not $c$, then we say $f(x)$ is uniformly continuous. This is a stronger condition than continuity, and often very useful. $\frac{1}{x}$ is not uniformly continuous on $(0,\infty)$, however (though it is on $[a,\infty)$ for any $a\gt 0$).