The Uchiha clan (うちは一族, Uchiha Ichizoku) was once considered to be one of the most powerful clans in Konohagakure, but is now almost extinct after the events of the Uchiha clan Massacre.
The Uchiha clan descended from the elder of the two sons of the Sage of the Six Paths. When it came time for the Sage to choose a successor, he questioned the two on what course of action they would follow to bring order to the world. The elder believed that might was the way to bring peace, while the younger believed love was the way. The Sage favored the ideal of the younger brother, and therefore designated the younger as his successor, causing the elder to be filled with jealousy and hatefulness. From the younger son descended the Senju clan who would be the eternal rivals of the Uchiha.
The Kyūbi no Yōko later on gave one of their members the Sharingan, in hopes of observing and removing any flaws from her creation before she applies the dōjutsu on herself.
The dōjutsu developed into their bloodline, leading them to great power and glory, and the corruption and arrogance that comes with it.
Before the founding of the ninja villages, the Uchiha were one of the many mercenary clans for hire. Because of the Sharingan, the Uchiha clan came to be known as one of the two strongest clans, the second being the Senju clan. Madara Uchiha was particularly powerful, and, upon attaining the Mangekyō Sharingan, he took control of the clan. Under his leadership the Uchiha grew stronger, conquering whatever clans they came upon, such that, whenever the Uchiha clan was hired for a job, the opposing side would hire the Senju, and vice versa.
The Uchiha clans bloodline limit - the Sharingan, allows the user to view chakra, copy ninjutsu, taijutsu, and memorise various visuals permanently. It also provides the user with increased perception and prediction abilities.