What is the polite way to tell people that I don't like to be touched?

The only way I could think of is to keep a distance when engaging in a conversation with anyone. The distance gives you ample time to react politely, such as taking a small step backwards while have a big smile on your face. Improvise in these situations and do the best you can but know that not everyone could read minds. That said the best way for avoiding contact is to take a defensive posture tactfully, learning to be street smart.