The ninja were the mysterious covert agents of Feudal Japan. Like a quiet version of James Bond, they specialized in assassinations, espionage, and sabotage; serving their masters in ways that those honor-bound pussies, the samurai, would not.
The first ninja legend dates back to the 4th century, when Prince Yamato, the 16 year old second son of the emperor, was ordered by his father to kill two brigand leaders who were causing trouble. At first the prince was confident because he could just overrun them with legions of skilled and fearless samurai who were ready to die for him at a moment's notice. Upon hearing the prince's bold and original plan, one of his loyal retainers meekly reminded him that the samurai wouldn't appear until several centuries later. Realizing that the man was right, Prince Yamato had him beheaded and then came up with an alternate plan. 
The prince decided to rely on his own wits and transsexual fantasies to get the job done. It is an undisputed fact that there are only two things rebellious assholes love more than being assholes: alcohol and jailbait. The prince knew this and dressed up in his aunt's lucky priestess robes and covered himself in girly shit. He then entered the enemy camp alone and presented himself to the brigand cheifs. Stupidly putting their guard down despite knowing that the prince was coming for their heads and possibly their foreskins, they had their adversary pour them wine until they had nearly passed out. Seizing the opportunity, the prince pulled out a knife and stabbed them both to death. Although the legend lacks smoke bombs, throwing stars, black-clad spidermen, heads flying off at break neck speeds (get it?), or even the word ninja; it solidifies the usage of disguises and trickery in Japanese warfare.
Probably not Prince Yamato.
Historically, the two places in Feudal Japan most known for spawning ninja were the neighboring Iga and Koga regions. There, among the mountains, two different schools of ninjutsu developed: the Koga-ryu and the Iga-ryu.
This man teachs the Koga-ryu class on Pokemon warfare.
A common site in Iga-Ueno, Japan.
There, a daiymo (lord) with an axe to grind and an unfaithful mistress in his dungeon could choose from one of the two schools and hire some sneaky bastard with liquid nitrogen pumping through his veins to help do his dirty work; whether that be an assassination, kidnap of a small child, or theft of the opposing daiymo's one-of-a-kind underwear so it could be hung from the castle's flagpole. Hired ninja were rarely ever trusted beyond a few missions; however, because it wasn't unheard of to have a ninja work for one lord one year and then an opposing lord the next. It was this lack of loyalty to their employers, in addition to their unwillingness to refrain from crouch kicks in combat, that led to the characteristic and mutual disliking between the samurai and the ninja.
Not all ninja were mercenaries with thoughts of money in their heads and balls of steel in their scrotums. Some were (supposedly) just as loyal to their masters as the samurai were. Having the trust of a reliable ninja was a very valuable commodity. Just like with serial killers and Jewish con artists, it takes a ninja to know how a ninja thinks. The stereotypical daiymo, unlike his stereotypical samurai underlings, was very afraid of dying, particularly at the hands of a ninja. These individuals would install floors in their homes that would squeak loudly whenever walked upon or had guards with them at all times, even while they slept. The shogun's family required that guests in their household wear baggy pants that would drag accross the floor so that it would be impossible not to hear them coming. One can only wonder if the shogun really thought that all potential assassins intended to obey the rules of the house before killing him. Historians consider this rule as the origin of the obnoxiously baggy pants fad that's currently popular with white teenage douchebags and gangbangers. There are even records of daiymo secretly visiting hot spring resorts far away from their castles if they suspected an assassination attempt was imminent. Hopefully, these resorts had drains in their springs that could remove all the shit and piss that the daiymo released whenever someone surprised them while they were bathing.
Like Cracked writers, ninja were also great at spreading rumors and misinformation. Most likely, the legends about ninja, such as being able to fly and turn invisible, were fabricated by ninja themselves. It was simply a matter of dressing up as a monk or a peasent, claiming to be an eyewitness to last week's exciting post-daiymo assassination attempt ninja chase through the village, and then exaggerating or distorting the details behind what happened.
Although they lacked Q's technology or James Bond's rockin' tuxedo, the ninja's resourcefulness was unmatched. Their equipment is a testament to their ingenuity and, in part, explains all the myths and folklore that surround them.
This is the ninjato. It is thought to be the primary weapon of the ninja. They are typically smaller than the samurai katana; hopefully so it could be duel-wielded like in the movies. According the website this picture came from, some people believe that ninjato were used for more "utilitarian purposes" and not as much for killing people. These people are communist retards. Ninjato were for killing people.
These pointy little bastards are the famous ninja throwing stars. They are part of a wide arrange of weapons known as shuriken. Shuriken refers to any concealable weapon that can be thrown from the hand. Other examples of shuriken are knives, metal spikes, and needles. Unlike today's fancy stainless steel throwing stars, period shuriken were often made of cheap, melted down metal tools, and, as a result, few are still in existence today. Contrary to what Naruto would have one believe, shuriken were never intended to be very accurate in combat and instead used as distractions. Faced with the chance of getting caught, ninja would often throw a few back at their pursuer's face to scare them into breaking off the chase or make them think they had been cut by an "invisible blade." Another popular technique would be to throw them into the ground in hopes that somebody would be careless enough to step on them. The devious ninja would even spike them with posion or tetanus, making even a scratch potentially lethal. This was bad news for anyone who crossed the ninja, though. All ninja who were good at their jobs were devious. Even climbing tools such as grappling and hand sickles could easily be weaponized.
It is hard not to imagine ninja fortresses not having some kind of laboratory designed for making new kinds of face-melting acids to squirt through staws into an enemies face and turning ninja poo into gold (much easier to do than with lead). From smoke and flash bombs that you can learn to make here, here, and here*; to flaming arrows used to start fires in castles, to primitive landmines, to rifles used to snipe opponents on the battlefield from the trees; the ninja had a tool for every situation. Even sex acts were covered.
The design of the Fleshlight was inspired by ninja scrolls found in an active supervolcano. 
It is possible that the entirely black-clad ninja was just a myth created by people wanting to romanticize the ninja by creating a mysterious appearence. It is also possible that Glenn Beck is really a covert liberal acting like a moron on TV to further alienate moderates from the Rebulican party. It's just improbable. Actually, according to Wikipedia, there is more evidence that ninja wore laced-together leather plates or metal ring mail with dark red (to hide blood stains) and black cloth over the armor than just jet black garbs. In fact, battlefield ninja armor may have closely resembled the demon-inspired look of the samurai armor, as evidenced by this supposedly genuine piece:
Despite what Ninja Gaiden, with its spectacular weapons, would have one believe; ninja were pretty cheap.
However, most of the time, ninja, like all good covert agents, did there best not to stand out from other people and used their boring day jobs such as monks and peasants as a cover so they wouldn't attract unwanted attention. This came with a cost; however. A good ninja wouldn't let any outsiders know of his activities, therefore dooming his no doubt legendary exploits to obscurity.
*Cracked.com nor the author of this topic page assume any responsibility for what happens to you when you inevitably burn your house down while trying to make homemade ninja smoke bombs.
Considering how popular ninja have become both in and outside Japan, it would be hard to define what exactly a ninja is without some sort of historical context. Besides spies and assassins, ninja have been depicted, through the mediums of TV, comics, and movies as mutants...
Despite his turbo murder machine appearence, the noble thief Yoshimistu is a generous soul.
...kids with bright, tacky attire and mystical scrolls...
...smoking hot demon exorcists...
Yoshimitsu is FEELING FABULOUS!
Of course, it is to be expected that people who worked in secrecy and thrived off the darkness only become more exaggerated and wild in the public's imagination as they grow more and more popular. It's only fitting that the people who gave us the phantom jerk would become so famous.