Index fossils aren't a dating method themselves and shouldn't be confused with that. They are just a short cut. So if you see a certain index fossil in a rock you have a pretty good idea of the time period.
It's like if you're a car nut. If you see big fins you can say it's about a 1960 plus or minus a couple of years. It's not definitive but you're going to be right a lot more than wrong.
In fact, if you're a car nut like me you can look at a car and guess it's date and make from things like headlights. The manufacturers followed certain styles and each one has a "look" that stays in the cars for decades. Which picks the make. The some detail picks which half decade you are looking at.
Just like index fossils it isn't a real "test" just makes life easier when you are out in the field. You might guess that a certain standstone should be Cretaceous but seeing a fossil in it that only existed in that era nails it down.
The index fossils are established when it is shown over time that the particular fossil has only ever been found in a reasonably narrow band of time as determined by "real" dating methods.
You also only pick as an index a fossil that is very common for the time period and easily identified.