Tailed Beast

In the Naruto universe, there are nine giant demons called the that inhabit the planet. They are actually living chakra in physical form, often referred as "Chakra Monsters". The Akatsuki organization has a plan that involves the capture of the Tailed Beasts.

History
The Tailed Beasts have been around before the First Great Ninja War. Because of their immense power, the shinobi tried to use each of the Tailed Beasts as military weapons during the Ninja Wars. After the Wars, Hashirama Senju, the First Hokage, managed to capture and control them with his Mokuton techniques, and used them as a peace treaty to the other great shinobi nations, in order to stabilize the balance of power between them. After his death however, the shinobi nations couldn't control these giant demons themselves and they began to run wild. Their attempts to capture them and harness their immense power failed as no nation could control such power. Instead, the nations moved to capture the Tailed Beasts and seal them within humans, which they were called Jinchūriki. This method worked and by the time period of the series, the only known Tailed Beast to have not been sealed into a human was the Three-Tailed Beast.

Jinchūriki
The, or hosts, exhibit extraordinary powers, and in some cases are stronger than their Tailed Beasts for the very fact that they are able to control their power.

In addition, if a Tailed Beast goes too long without a host, it can lose its intelligence and become nothing more than a giant animal thus making it weaker.

One-Tailed Shukaku

 * Name:
 * Creature Type: Tanuki (Racoon-dog, native only to Japan and other Asian countries)
 * Host: None, formerly Gaara and previously two unknown Sunagakure citizens.
 * Unique traits: Ability to spit concentrated balls of wind mixed with chakra
 * Status: Captured, extracted, and sealed by the Akatsuki

The One-Tailed Shukaku was one of the Tailed Beasts that inhabited the Land of Wind prior to the start of the series. Its only known host was Gaara, but was later captured and sealed by the Akatsuki.

Two-Tailed Demon Cat

 * Name:
 * Creature type: Nekomata (Magical two-tailed cat)
 * Host: None, formerly Yugito Nii
 * Unique traits: Fire-breathing
 * Status: Captured, extracted, and sealed by the Akatsuki

The Two-Tailed Demon Cat is a fire-breathing, flaming cat sealed within Yugito Nii of Kumogakure, the beast was said to be a spirit of vengeance.

Three-Tails

 * Name:
 * Creature Type: Turtle-like creature
 * Host: None
 * Unique traits: Unknown
 * Status: Captured, and sealed by the Akatsuki.

The Three-Tailed Beast is a gigantic, turtle-like demon that Akatsuki assigns Tobi (with the help of Deidara) to capture.

Four-Tails

 * Name:
 * Creature type: Unknown
 * Host: None, formerly an unnamed elderly man
 * Unique traits: Access to many types of elemental chakra
 * Status: Captured, extracted, and sealed by the Akatsuki

The Four-Tailed Beast was sealed within an elderly man of unknown origin who was eventually captured by Kisame Hoshigaki.

Nine-Tailed Demon Fox

 * Name:
 * Creature type: Kitsune (Magical many tailed fox)
 * Host: Naruto Uzumaki
 * Unique traits: Near-limitless chakra, massive strength
 * Status: Active, sealed in host.

The Nine-Tailed Demon Fox is the most powerful of all the Tailed Beasts; a single swipe of one of its nine tails can raise tsunamis and flatten mountains. After the demon fox attacked Konohagakure, Minato Namikaze, the Fourth Hokage, sealed it into his newborn son, Naruto, by using the Dead Demon Consuming Seal, sacrificing his own life to do so. It is said however that Madara Uchiha had the power to control the demon fox, and it was believed that Madara, or any Uchiha as far as Konoha's council was concerned, was the one behind the attack on Konohagakure. When consumed with strong emotion or physical damage to Naruto's body, the demon fox's traits appear within him, and he eventually completely loses control of himself.

Legend of the Tailed Beasts
According to some fans, the "Legend of the Tailed Beasts" is an epic story from Japanese folklore which Naruto author Masashi Kishimoto draws from to create the tailed beasts in his work. However it is an example of internet-based fakelore which originated on Chinese websites, some suspect this chinese site.

The veracity of the legend breaks when it is cross-referenced with non-fandom sources on Japanese folklore. For example, the isonade, which is held to be the three-tailed beast in this account, is in fact equipped with only one large, hook-covered tail, and the "houkou" which is actually a Chinese creature called penghou, named as the five-tailed beast, has no tail at all. The badger was said to be the lord of all these beasts in the original legend, and Naruto fans have claimed certain Bijuu to be a badger instead of it's true form which was a tanuki for Ichibi no Shukaku and a bat for Shichibi no Makumore)

Additionally the author of the story admitted it was not a true legend, unfortunately it has gone largely unnoticed by most fans of the story.