Shinobi History
In the later 14th Century Ce, Japan was fractured and falling apart socially. Shoguns and daimyos, warring for dominance, all had their personal assassins, trained in esoteric but mortal methods of discreet warfare. This fragmentation had also broken the power of the Shinto pantheon, as worshippers started to drift more and more apart and the gods bickered over increasingly weaker domains.
The Dutch arrived in 1640. The introduction of trade and other religious beliefs starts to weaken the Shinto pantheon even more. Moreover, particularly potent entities of significant temporal power on Earth arrived in Japan and offered Faustian bargains for power, furthur corrupting Japan's leaderships.
The gods of the Shinto pantheon sought to arm their people against these hostile ideologies and new magic. They empowered certain faithful with remarkable, rare magical talents, training their select few in remote and inaccessible locations. Priests actied as sensei and spiritual leaders alike. Methods and results were very idiosyncratic; every god has their own school of magic, combat, and tactics. Relatively few of the gods have a working relationship with one another.
Students of the Shinobi arts develop magical talents as well as refining esoteric physical skills. As they master increasingly difficult and arcane methods, their magical talents continued to advance. The champion of each individual school becomes the Emissary for their god, a true Shinobi and empowered with unique and divine power from their patron.
From the Shinto pantheon, the most worthy Shinobi was selected to represent the entire pantheon's interests. It's a lifetime appointment-- keyword 'lifetime'. These ascendants are 'Divine Shinobi', literally divine emissaries of the entire Shinto pantheon and essentially demigods in their own right.
The first schools were founded near Koga. A second one was opened up in Igo not long after, as several of the female deities broke away to form a college for training the women (the Kunoichi). Much tension exists between the gods of the schools, though their followers tend to find more reasons to cooperate than distrust one another.
Around 1730, an ambitious young Shinobi candidate was passed over for appointment to role of Divine Shinobi. Humiliated and angry, he stole much forbidden knowledge, murdered the Sensei, and forsakes forsook his oaths of silence. He found the darkest shadows in Japan and mades profane sacrifices to whomever would heed him. His prayers were answered by an ancient and malevolent entity call The Beast.
In exchange for giving the Beast all the secret knowledge of the Shinobi, he was empowered by The Beast with dark and terrible magics. He became the Dark Shinobi, and started a secret guild of magically-trained assassins which was eventually called The Hand. Murderers, poisoners, provocateurs and sabotagers, they would sell their talents to anyone with the coin-- or donate their assistance to anyone who advacned their causes. As jealous masters hoarded their own knowledge, splinter groups inevitably sprung up as factions within the Hand. Only leaders of supreme charisma and significant personal power are capable of uniting all five factions of The Hand into a single fist.
Over time, shoguns and daimyos copied the Shinobi method and start their own schools and secret monasteries. Some of these schools unlocked their own magical esoteries, though few of them came close to the power of a true Shinobi. Still, these agents of espionage became what people in the larger world consider 'Ninja' in modern parlance.