Great Youkai War

About
The Great Youkai War was a conflict that took place within JAPAN in the year GI1012.

An Army of Youkai led by the 2nd Youkai King, the Nine-tailed Fox Omachi, rised with the objective of killing humans and leave JAPAN as a country of only Youkai. Many Youkai that hated humans sided with Omachi, but not all of them agreed with her, which led for another faction of Youkai commanded by Dokuganryuu Masamune to appear. Unlike Omachi, Masamune wanted to have peaceful relations with humans and he allied with other Houses to battle the Youkai King.

Masamune's most valuable ally was the former Oda Nobunaga, father of the present Oda Nobunaga and Kouhime. He fought cheek by jowl with Masamune against Omachi, being the Oda House the biggest participant in the war.

Omachi declared that she wanted freedom for Youkai and was an intellectual woman with great charisma as a leader. She managed to get a huge war of Youkai to wage war against Masamune and humans. During the war, many brave soldiers and youkai perished, but the most notable were the Legendary duo of Ninjas, Gekkou and Shinobu, retainers of the Oda House who gave their lives by using suicidal bombs to take down a large portion of the Nine-tailed Fox's Army.

At some point, Omachi grew desperate and unsealed a Forbidden Youkai called the Soul Binder, who spread a deadly curse over the people that spreads upon physical interaction. The curse kills the person but traps the soul inside until they've touched 5 other people (which spreads the curse), at which point their souls are freed from their corpse. It caused a huge pandemic that took the lives of countless people and was only resolved by burning the bodies of the cursed en masse. The previous Oda Nobunaga perished at the hands of curse, but the Soul Binder was sealed again.

Eventually, Masamune managed to defeat Omachi and the conflict ended.

The Aftermath
With Masamune's victory in the Great Youkai War, the Youkai were all gathered and taken to Ezo in the northeast part of JAPAN. Masamune became the 3rd Youkai King and wanted to leave peaceful relations with humans, but without ever interfering again with them and allowing Youkai to live in his new independant territory. The northern part of JAPAN is harsh environment for humans but it is rather comfortable to the Youkai.

Originally, Youkai and humans were able to get along with each other, but since the war there has been mutual distrust. Masamune believes the wounds of war can only be healed with time, and thus he gathered the Youkai to the north to break off contact with the humans (though some Youkai remained with the humans), hoping one day Youkai and humans can get along once more. The main reason why he refuse to battle in the Sengoku Period was to avoid fighting humans again and only took part if it was absolutely necessary.

The former Youkai King, Omachi  actually fell in love with Masamune and married him. She changed her manner of thinking and loves Masamune deeply, choosing to believe in what he fought for.