Kaede is Kikyo's little sister and the Sengoku period's villiage priestess.
After her sister's death, she assumed the position of shrine maiden/village
priestess and took over the responsibility of leadership and protecting the
village from demons. She seems to serve as the Sengoku period's version of
Grandpa Higurashi, except considerably more competent and serious. She is a
font of knowledge and lore, and her powers actually work. One of the first
examples is in the second episode when she summons the Kotodama no Nenju
(Spirit Command Rosary) around Inuyasha's neck to get him under control.
Later in the series she creates a barrier of invisibility along with Miroku
in order to give Inuyasha time to rest and heal.
Kaede is originally introduced to us in the first episode/act as a small girl
rushing to aid Kikyo, wearing a bandage over her right eye. Although it's not
explained at that point, her eye was damaged during Inuyasha's rampage through
the village. Just before her death, Kikyo tells Kaede to burn the Shikon jewel
along with her body to keep it from falling into evil hands.
The next time we see Kaede is in the village after Kagome is captured at the
Sacred Tree. Fifty years have passed and she's now an old woman. She originally
believes Kagome is another demon and throws some sort of exorcising powder on
her, but soon realizes that Kagome is fact a reincarnation of her older sister
Kikyo.
