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The Uchiha clan was a clan of ninja who have the bloodline ability known as the Sharingan.
There are rumors that the Uchiha are descendants of the Hyuuga Clan, this is believed because both dojutsu deal with the ability to see through. The first know Leader of the Uchiha Clan was Madara, the elder of two bother that were the first clan members to have ever activated the Mangekyou Sharingan. Madara and the Uchiha Clan joined forces with who would later be known as The First Hokage and the Senju Clan to create Konohagakure.
After the formation of Konoha the Uchiha Clan played a big role in the village serving as the military police of the village, and place there family crest as the emblem of the police. The crest is a fan(red on top, white on bottom), the fan represents the clans ability to control fire. The last chief of the the military police was Fugaku Uchiha, the father of Itachi and Sauske Uchiha. Sadly one night a fed up Itachi wanting to test his power decided to kill every member of the clan leaving only Sasuke alive. Until now it was believe believed that Itachi acted alone, but it turns out he was assisted by his teacher Madara Uchiha.
The Uchiha's Most powerful ability is the Mangekyou Sharingan, it is said that you most past test of killing your best friend to obtain it. The one bad thing is once it is overused the user starts to go blind, Madara found this out first. Madara, but his younger brother gave him his eyes which not only gave Madara his sight back, but gave him a more powerful Mangekyou Sharingan that would never lose sight. That began a long dark secret of those who are born Uchiha, killing their friends to obtain the Mangekyou and then killing their siblings to make the Mangekyou permanent.
In the final battle between Sasuke and Itachi, Sasuke proved you dont need the Mangekyou to fight and win against one of the most powerful Doujutsu. Zetsu stating that a ninja tool such the Sharingan is only as powerful as it user and Sasuke has proven to be the stronger user.
It's eventually revealed by Madara that the Uchiha are the descendants of Rikudou's oldest son and inherited his eyes and spiritual energy. Rikudou's older son formed a feud with Rikudou's younger son (whom inherited Rikudou's body and physical energy) when he was chosen by Rikudou to be his successor. Their conflict is said to be the reason behind the rivalry between the Uchiha and the Senju, the descendants of the younger brother.