The Hand has exited since Japan's Feudal period, some 400 years ago.
The Hand was began as a cadre of ninjas, thieves and assassins formed to fight the oppressive system of feudal Japan.
Around 1575 AD, in Kyushu, Kagenobu Yoshioka killed a foreigner. Kagenobu was taken in custody of Saburo Ishiyama, who trained him in the ways of the Samuraï at the Ishiyama School.
A ronin, Kagenobu served several Daimyos and Shoguns, opposing corruption and injustice for three years. At his sensei's death, he return to the School to lead it in 1588, offering a role of co-leader to his former rival Daisuke Sasaki.
Learning that the Daimyos were plotting to close rival schools, Kagenobu sent messengers to other schools and formed a secret society opposing the government.
In summer 1590, the Inner Circle of the Hand gathered at the Ishiyama School.
Soon, the Hand grew too large. It became hard to control : Communication between the sects broke off, Hand agents sold their skill as mercenaries and committed crimes against Japanase, and rumors or dissension led to internal power struggles. In 1594, Kagenobu confronted his former friend Daisuke Saski (who had called the Inner Circle to discuss the Hand without Kagenobu).
A swordsman without peer, Kagenobu did not stop until he had slain the entire Inner Circle of the Hand for their betrayal. Unbeknownst to him, however, the Inner Circle had formed a compact with an ancient demon known as The Beast. Their deaths fueled a ritual spell that called an Avatar of the Beast forward, which ripped Kagenobu to shreds. The Avatar returned the Inner Circle to life, allowing them to direct The Hand as a means of fueling the Beast's hunger for blood and death.
In the late 19th century, Hiraoka Kotaro had united the assassin clans under a single sect, with himself as the master of The Hand. A vicious and bloodthirsty man, he eagerly embraced the idea of Japan conquering China. This dovetailed into plans the immortal Vandal Savage had established decades previously, a distant but frequent shadow ally of the throne. Kotaro launched the Shinobi Insurrection, assassinating key politicians and aristocratic descendants of the shogunate. Many of his best agents went abroad at the behest of Savage, acting as infiltrators in scientific and academic circles. The closest English translation for the Hand was a similar, many-headed beast: HYDRA. Consolidated as a secret science service under the Weimar Republic, the decades of information theft were transferred to the authority of Johann Schmidt.
After Pearl Harbor, the Shinobi orders banded together and a shadow war erupted across Japan, culminating in the death of Kotaro at the hands of the Divine Shinobi in 1946. With Kotaro dead, the Hand fractured again into rival factions, several of which turned their affiliation as Harbingers cultists into membership with HYDRA.