The shinobi world was once controlled by numerous different factions and neutral inhabitants. This early in time chakra was known and used by those who trained as samurai however the shinobi profession did not exist. These samurai used chakra strictly as a body strengthening tool and nothing more. No modern forms of ninjutsu or genjutsu were known as the samurai devoted their training to swordplay and not to advancing chakra abilities.
The most dominant force in the land was an empire governed by a single shogun. This empire was centered in the area that now contains the Hidden Hill. This empire sought to expand their control to the entire continent using their armies of samurai.
Inhabitants of the region lived normal lives for the most part however every now and then some would be born with very high innate levels of chakra. These usually manifested themselves in uncontrollable ways which led to wide scale destruction in the areas they were in. Fear and panic would follow as little was known about chakra at the time and these people posed threats to all. So the Shogun ordered that all who showed signs of high levels of chakra be detained and imprisoned. Some were captured early, others ran and had to be hunted down, and some even turned themselves in but all were caught and imprisoned in the center of the empire.
Rather than leaving them to rot or simply executing them the Shogun envisioned a use for these people. They were isolated in a large complex in the countryside and told to train themselves to control their abilities. No samurai would train outcast souls like this so instead they were forced to learn subterfuge and guerrilla warfare tactics. Thus the first shinobi were born.
Years past like this and the shinobi progressed. They were not allowed to leave the complex. Not allowed families, ambitions, goals, or anything resembling a normal life. They lived and died as prisoners from the day they were caught to the day they died. However this forced method of training produced great results. Unlike the samurai they were told to completely master and control their chakra. Those who progressed well would teach those after them and thus the lessons were past on.
Soon the first forms of ninjutsu and genjutsu were discovered as well as chakra affinities and eventually second affinities. These discoveries they melded into their combat tactics making them their own. Samurai would continue to dismiss these new ways as inefficient in regular front line combat, leaving the shinobi with a very unique role in the shogunate. The first squad was sent out to deal with a group of rogue samurai who had deserted the empire and were attacking caravans in the hills. The regular army was having difficulty tracking them down. The group of four senior shinobi were dispatched with low expectations. Many felt that their abilities were more suited as parlor tricks than actual combat maneuvers. Still these shinobi were expendable and so they could send endless waves of them at the enemy if the need arised. When the shinobi returned much earlier than expected, having wiped out the enemy forces with little difficulty, it changed the way the empire would do combat forever.
Shinobi battle squads were formed and sent out for a variety of missions after that. With each mission the samurai of the empire would lose more and more of their value. Shinobi were proving unstoppable in small scale battles. They also took no income and were completely expendable so the Shogun saw less and less use for regular samurai. The empire’s borders expanded greatly, its enemies having no way to compete with the shinobi forces.
When the first among the shinobi unlocked kenkai genkais things changed again for the empire. The Shogun recognized the uniqueness and strength of these powers and he did not want to lose them when the shinobi died. So after much deliberation it was decided that these shinobi would be elevated above the rest. Allowed to move out of the shinobi complex and have families. As expected the children of these shinobi would prove to also have the same abilities of the parent. The first shinobi clans were formed.
The Shogun pit these clans against eachother. Giving praise, honor and rewards to those who completely their missions the most efficiently. The clans struggled desperately to gain whatever rewards they could. Despite the elevation shinobi were still considered lower than common citizens. Their children were born and raised as shinobi and would live and die in service to the empire in the same fashion as their parents. This would prove to be a sore spot for the shinobi. Where once they were all individuals that struggled together with others who were captured, now their own children were born into this way of life. Children who would never experience freedom or own their own lives. It was a fact that did not sit well in their minds.
In regards to the expansion, the clans made short work of whatever remaining opposition the empire had. The Shogun now controlled the entire continent, all bowed to his will. However instead of bringing peace to the land this only sparked infighting between the high nobles of the empire. They demanded access to the shinobi clans and pitted them against eachother in their own personal vendettas. The Shogun allowed the practice as it not only pleased his supporters but kept the shinobi active and sharp while the rivalries between the clans would prevent any from joining together in revolt.
This was the theory at least. It did not stop the clan leaders from one day meeting in secret. They discussed their future as shinobi, and that of their children. They agreed that they could just sit by and let their children live their entire lives never knowing freedom. The Shogun relied too heavily on his free source of military strength to ever allow things to change. The only option remaining to them was a planned coup. Thus the shinobi set to work making arrangements. Eventually the day came, and over the course of one night every shinobi in the empire rose in unison as they overthrew the Shogunate. There was little resistance, shinobi were too deeply entrenched into the empire’s defenses. Many noble families employed only shinobi to defend them. These were all wiped out without mercy. The Shogun and his family itself were assassinated in the same night. By morning not a single remaining official of the Shogunate was left alive. The work was bloody and the shinobi took no chances. Never again would they succumb to a life of slavery.
The days following the mission were full of confusion and panic. The common people did not know what to make of the sudden change in power. Some feared the shinobi and ran away with their families while others stayed and submitted themselves to shinobi rule. The clans however had a hard time adjusting. Many still felt resentment not only to the common people but to the other shinobi clans. Old rivalries would not be so easily dismissed. Instead the clans split and went separate. Each making a home in what would eventually become the different Hidden Villages. Those shinobi who had no clans remained in the area where the Shogun was and eventually formed the Hidden Hill. Each village has their own unique story to the trials they faced as they formed their village.