12 years ago, a demon fox known as the nine-tails savagely attacked and ravaged the village. It was, however, subdued by the Hokage at the cost of his own life as well as his wife's. The village, having lost its leader, temporarily re-appointed the previous Hokage to lead the village once more. Having returned to service after hoping to have a peaceful and quiet vacation from retirement, the old Hokage decided to rule the village with an iron fist and an iron rod.
The demon fox had not been destroyed, however, and was kept alive. Sealed. Into a child's body. By his own father. Later, the old Hokage hoped to train and use him as an elite ninja for his own secret purposes.