According to legend, Onigafuchi village was once attacked by demons pouring from the Onigafuchi swamp. Oyashiro descended from the heavens to stop the demons. After subduing the demons, Oyashiro ordered the demons to leave the village. However, the demons had been banished from hell and thus had nowhere to go. Taking pity on demons, the villagers offered to let the demons live alongside them. Oyashiro, pleased with the villagers, granted the demons a human form so that they could coexist with humans. Oyashiro also established a number of rules regarding the coexistence of demons and humans, most notably "don't leave the village." In reality, the "demons" of this legend were people infected with Hinamizawa Syndrome, not actually demons. Oyashiro's rules were meant to contain the syndrome, as being separated from the "queen carrier" would exacerbate the syndrome and induce insanity in whoever left the village. Despite this, there does actually exist a deity within Hinamizawa as a result of the human sacrifices used in the traditional Watanagashi Festival. The sacrifice of Hanyuu Furude led Hanyuu to become a godlike figure that is commonly referred to as Oyashiro.
The curse of Oyashiro
The "curse of Oyashiro" is said to occur when Oyashiro is angered, which typically happens when the rule of not leaving the village is broken. In modern times, "Oyashiro's curse" more often refers to the series of mysterious deaths that coincides with the Watanagashi Festival. However, despite referring to these deaths as the "curse of Oyashiro," most villagers actually believe that the mysterious deaths are being carried out by someone in the village, with the most common belief being that the Sonozaki family is responsible.