Gensou no Ken features two modes of play that cover the same plot from two different perspectives. The general, non-spoiler plot is described as follows.
Just a sword.
A sword passed down from generation to generation in a Japanese family, completely unaware of what it was. Completely oblivious to its powers. Completely ignorant of the consequences of wielding it. The meaning of the sword was lost to time as it was handed down as a sacred family heirloom, bearing a striking resemblance to the Sacred Treasure of Japan, the blade Kusanagi. This was the blade of illusions, Gensou no Ken.
Centuries later, the sword was still being passed down. However, the family had noticed a sudden increase in hardship; family members would disappear for days on end without a word, only to wind up back at their respective homes holding the sword in disturbing, lifeless hands, flat on their backs--evil had gorged upon their existence. Fearing for their lives, the family wasted no time in giving the sword away. Aware of the coincidence of various murders and horrible deeds connected to it, the sword's rich new owner immediately contracted a job for burying it deep below the earth in hope that never again would it be seen or used.
The sword never reappeared, much to their relief, and the once cursed family had returned to normal soon afterwards.
Having been forgotten for years, Gensou no Ken sat unmoving in its burial ground...until one day, when the sword mysteriously drifted into Gensokyo.
In the new world, the sword gained the ability to entice those around it, as well as a murderously devilish conscious. It waited innocently for a new owner. Various youkai were drawn to the sword, only to be absorbed almost effortlessly by its soul-eating nature. Lesser creatures fueled the sword's desire for destruction. Still, it waited for one worthy of its vampiric grip of finality. Soon, such an individual would reach down and seize it--unknowingly unleashing a frightening power within the magical world...