Chakra

Essential to even the most basic jutsu, chakra is mixture of the energy present in every cell of the body and the spiritual energy gained from exercise and experience. Once mixed, it can be channeled through the chakra circulatory system, which is to chakra as the regular circulatory system is to blood, to any of the 361 chakra points (called tenketsu) in the body. Through various methods, the most common of which is hand seals, the chakra can then be manipulated to create an effect that would not be possible otherwise, such as walking on water.

By mixing different ratios of the two energies, new type of chakra can be formed. The most common product is elemental chakra, which is use to perform elemental jutsus. Most ninja have a natural affinity to one type of chakra, but they have the capacity to create elemental chakra apart from their own affinity. There are six basic elements, each stronger and weaker to another; five have been shown so far, but their relations, weaknesses, and strengths to each other are all explored with the unnamed sixth seemingly skipped. In addition to these six elements, certain kekkei genkai can mix elemental chakra to form new elements, such as ice (wind and water) and wood (earth and water). While many ninjas can use more than one type of chakra, they cannot use them simultaneously (with few exceptions).

Normal Chakra
Normal chakra is a form of energy all living individuals naturally produce. The energy circulates inside the human body, similar to the cardiovascular system, controlled by the Eight Gates, but can also surface outside the body. It is not normally visible to the human eye when it is use to perform a jutsu. Chakra is visible in situations where a person is releasing as much of their chakra as possible, though this is rarely seen. It is also visible when doing a specific jutsu (Kaiten, Rasengan, Healing Techniques, etc) which takes a high degree of chakra control to perform.

Out of the many different types of jutsus: Ninjutsu, Genjutsu, Doujutsu, and so on, all require the use of chakra. However, Taijutsu is different. It basically requires no chakra use whatsoever. Stamina is all that is needed. While the ninja still needs a set amount of chakra to live (i.e. life force energy), regular Taijutsu doesn't require any active molding or manipulation of chakra (with few exceptions). A standard attack like a punch or kick falls into this jutsu category.

Chakra is the resulting form of energy when 2 other forms of energy are mixed together. The 2 energies are referred to as "physical energy" and "spiritual energy". Physical energy is collected from the body's cells and can be increased through training, stimulants, and exercise. Spiritual energy is derived from the mind's consciousness (i.e. the soul) and can be increased through studying, meditation, and experience. Having these 2 other energies become more powerful will in-turn make the created chakra more powerful. Therefore, practicing a jutsu repeatedly will build-up experience, building up one's spiritual energy, and thus allowing more chakra to be created. As a result, the ninja is able to do that same jutsu with more power. This same cycle applies for physical energy, except this time, instead of doing things like meditation, the ninja could, say, do push-ups. The general term for the source of chakra, the overall physical and spiritual energy a person has, is "total stamina".

In Naruto, chakra takes time and lots of training to gradually build up. So what's really the key is not actually having chakra, but being able to sufficiently control it. Because, everyone has chakra, but only skilled ninja can correctly "mold" and "manipulate" it to it's fullest extent. Molding chakra means to extract energies from both the body's cells and the mind's consciousness, then mixing them together within the individual. The amount of each energy will differ from the type of technique the ninja wishes to execute. In other words, a ninja could create too much or too little chakra for a given jutsu, and the chakra cannot be used efficiently. In addition, even if a ninja is able to mold the correct amount of chakra, if they aren't able to manipulate the chakra properly, the desired jutsu won't be as effective or not executed at all. Wasting energy will create a weakness of not being able to fight for a long period of time.

When creating a Ninjutsu, the two methods of manipulating chakra is referred to as "Elemental manipulation" and "Spatial manipulation". Elemental manipulation deals with changing normal chakra into one of the 5 basic elemental chakra. Spatial manipulation deals with controlling the shape and potency of chakra. These 2 methods can be implemented separately or together in order to create a Ninjutsu. The series hints of a 3rd method of manipulating chakra ("Yin & Yang manipulation"), though it has yet to be revealed.

As an in-between stage, some ninjas can partially control their chakra. This means they can use their chakra, but not effectively control it, which results in a poorly executed justu, and more importantly, running out of chakra early in a fight. To manipulate their chakra more easily, hand seals can be used. With these hand seals, users can control their chakra with higher efficiency, allowing them to execute their jutsu more effectively. Different jutsus require a different hand seals.

The general term for the exact molding and proper manipulation of chakra is "chakra control".

Basic Elemental Chakra
Based on which Ninjutsu the ninja uses, the amount of chakra will be different, as would the element the ninja employs. The five main elemental types are also the names for the Five Great Shinobi Nations: Fire, Wind, Lightning, Earth and Water. Each ninja has the potential to better utilize one of these styles and potentially more.

Chakra types such as wood and ice are the result of combining different elemental chakra types, such as the Kekkei Genkais Wood Release of the First Hokage, Lava Release of the Four-Tailed Jinchuriki, and the Ice Release of Haku.

Orochimaru's Cursed Seal Chakra


Orochimaru gives many of his subordinates a cursed seal to increase their power in exchange for their free will. To do this, Orochimaru first bites the target on the neck, leaving a seal composed of three identical marks arranged in a circular pattern. The target then loses consciousness. If the target survives, he/she would wake up with a level 1 cursed state. The curse seal works by forcibly drawing chakra from the body, allowing the user to release more chakra than they normally are capable of. The curse seal then alters the user's chakra, making it more powerful and sinister. In the anime, this sinister chakra takes on a purple color.

Tailed Beast Chakra


In the Naruto world, there are nine Tailed Beasts, which are ancient demons with immense chakra. In fact, they are malevolent concentration of chakra that has taken on a corporal form (mind and body). During the Great Shinobi Wars, each country's Hidden Village tried to make use of the Tailed Beasts for military purposes and competed for them. However, no one was ever able to truly bring the Tailed Beasts under control. The only way to partially control them is to seal them within a human with powerful sealing techniques. The hosts of the Tailed Beasts are called Jinchūriki.

The Jinchūriki can tap into the Tailed Beast's chakra for his or her own power. However, using such chakra can be harmful to the Jinchūriki, with the host's body and mind being influenced or even taken over by his or her demon. In the case of Naruto Uzumaki, when he uses the Nine-Tailed Demon Fox's chakra and reaches his four-tailed transformation, the chakra is so concentrated around his body that it constantly burns and repairs his body right away, shortening his lifespan. Tapping into such unnatural chakra is very harmful to the host, as the host's personality gets suppressed by the animalistic blood lust of the Tailed Beasts and the intensity of chakra will harm the host if used for extended period of time.

Senjutsu Chakra


Natural chakra, the chakra needed to perform Senjutsu, is chakra that contains the energy found in nature itself. It's a powerful source of energy, able to grant a ninja increased strength, speed, and endurance for taijutsu, as well as enhancing the power of one's ninjutsu and genjutsu. Hermit chakra is created through the three-way mixing and balancing of one's physical energy and spiritual energy, as well as the natural energy from the atmosphere/air and terrain/ground. Since the three energies need to be equally balanced, the higher one's personal chakra capacity (physical energy and spiritual energy), the more natural energy they can add to the mix. Only those with a large chakra capacity can gather the natural energy needed for entering a powerful state called "Hermit Mode". Also, only when a person remains "perfectly still", no longer disrupting the flow of nature around them, can they properly feel and harness natural energy. Remaining completely still for a period of time takes a great deal of concentration and patience, requiring a highly motivated state of mind.

Trivia

 * Apparently chakra can have colors as Naruto Uzumaki has stated he has a yellow chakra (blue in anime), and an obvious example is the Nine-Tailed Demon Fox's red chakra.