HIDDEN LEAF VILLAGE
A handful of prominent shinobi clans loyal to the ruling party served as the many right arms of the government, sustaining a marginal level of order through the Land of Fire until the daimyou of the time was assassinated by an unknown assailant. This brought into question not only the capability but the necessity of these shinobi clans. The traditional clans of samurai, who had long ago been pushed far north to the Land of Iron, slowly began to regain ground, eventually replacing at least two of the previous vassals.
In order to consolidate their own positions of favor with the daimyou, the remaining vassals began to take surreptitious action to break the trust between rival clans and the ruler, covertly undermining one another before eventually waging a full-scale war.
The lesser clans were swiftly eradicated while others simply fled the steadily-increasing level of chaos permeating every inch of the country. Peasant rebellions were formed in places while other once-major cities became abandoned and lawless zones controlled by bandits. Taking advantage of their narrowing focuses, many samurai clans moved on those shinobi clans that remained to removed them altogether.
Finally, before the few remaining clans could eliminate one another, a treaty was hastily made, bringing the many groups of Ninshuu practitioners together to form a united front against their samurai adversary. Before full-scale war was seen, however, in order to facilitate their own continued existence and bartered services, the samurai negotiated an armistice with the daimyou alongside the gathered shinobi to form the Land of Fire. Within the massive country, both shinobi and samurai coexisted for a time after the formation of Konohagakure.
However, the superior skill and number of the shinobi would see to the eventual migration of these disenfranchised mercenaries back to their northern territory.