Danzō Shimura

An elder ninja of Konoha, is a war monger whose politics operated in opposition to the Third Hokage's politics. Within the ANBU corps, he created and led the training division known as Root, which was detached from the main ANBU. The Root group was disbanded and he lost his position, however many of its old members are still loyal to him. He is still a major piece in the power play of Konoha, though with his own influence within the village

Background
In the past, he competed with Sarutobi for the position of Third Hokage. He created the (now disbanded) ANBU training department known as and acted as its head. Danzo was the one who recommended that Sai be placed in Team Kakashi. He appears to have lost an arm at some point, the cause of which remains unknown, and may have also lost his right eye.

Even though he is not an official part in the leadership of Konoha, the two Konoha Elders still hold him in high regard and have often taken his advice when dealing with the politics of the village.

He later on took part in the dealings with the Uchiha Clan, when they learned that they were planning a take over of the village. He took part in planting Uchiha Itachi as a spy in his own clan, and it is supposed that it was him who ordered the annihilation of the clan in order to avoid a civil war that would lead to the destruction of the village.

However after assignment was over, it is somehow revealed to him that Itachi was unable to kill his little brother, and he was later threatened by Itachi, that he would tell everything if he ever touched Sasuke.

Personality
Danzo is a blunt tactician, which is demonstrated by his preference of eliminating threats and ordering them executed instead of using negotiation. His ideology regarding shinobi is parallel to that of fascism. Albeit not an official part in the affairs of Konoha, he still maintain an eye on everything, and will immediately act if he sees anything that might look like a threat to Konoha.

Even though he addresses Tsunade politely, he is not pleased with her. This is mainly because she is the granddaughter of Hashirama Senju the First Hokage and like Sarutobi has inherited the same teachings and philosophy as him, something that Danzo opposes.

Sai and Sasuke Arc
Despite Danzo's apparent support for the Hokage and Konoha, Tsunade does not trust him; this is apparently well founded, as Danzo had given Sai a secret mission that Tsunade was unaware of: sending Sai to contact Orochimaru and offer to act as a subordinate for him. Yamato believes that Danzo is trying to take over Konoha with Orochimaru's help. This is apparently proven when it is revealed that the envelope Danzo sent Orochimaru was full of pictures and information on the true identities of Konoha's ANBU. However, all of these are nothing more than a front to let Sai get close to Orochimaru, so that Sai can execute his true mission: the assassination of Sasuke Uchiha. After learning of the failed assassination attempt of Sasuke, and Sai's attachment to Team Kakashi, he merely states that "emotion brings hatred, and hatred brings war."

Speculations
Fans has speculated that Danzo could also be Madara Uchiha, Tobi has bolts on the same arm that Danzo has covered up. Similar hair styles. Not only that, he and Madara share the same hate for the First, Second, and Third Hokage's Teachings and Philosophy. Plus Madara hates the Senju clan, and the first and second were both Senju. Danzo also despises Tsunade for being the Grand-daughter of the First. Danzo also has the same eye covered up that Madara has his Sharingan. Kisame's revelation of Madara being Mizukage offers more support to this theory as Danzo's Root is said to use extremely similar methods to Kirigakure earlier on, the education that led to the village being referred to as the Village in the Bloody Mist.

Danzo is also said to be incredibly handsome when he was younger (probably as handsome as Kakashi seems to be when his mask comes off) because Tsunade and Shizune look through old photo albums in the extra at the end of shippuden episode 63.