Not one of the original clans, the Inei clan was originally one with the Nara clan. Back then, the clan was much different, run by two twin brothers; equal heirs. Their names were Shikakuro and Shadjin, and though having a good relationship with one another, they were opposites. Yin and Yang.
Shikakuro was much like one would expect a stereotypical Nara to be like. He held strong resolve, great skill, and amazing intelligence, but he was too carefree, unmotivated, lazy, and held a small fear of women. As a leader, he was disorganized, but benevolent.
Shadjin was more competitive. He valued both himself and others by his/their success as a Shinobi. If he was not completing a mission, winning a competition, saving the day, and training intensely, then he was unfit to even be alive. This was his resolve: Live as the best, or die. Even as he matured, he became increasingly overbearing, and drove himself to his peaks, until he finally caused his body so much fatigue that he was hospitalized and exempt from Shinobi duties for a time. His time out of action was an unbearable hell to him, and he began to take out his inactivity on the clan members, by conducting Clan-wide training sessions that were unethical, pointless, and unhealthy difficult. In this time, he severed his bond with the Nara.
Once he was better, he attempted forgiveness, but the clan did not trust him. With his brother leading this, the clan impeached Shadjin and removed him from the clan. Then, in an act of ‘Clan cleansing’, they removed any-and-all connections with him, completely removing his history as a Nara. Shikakuro offered Shadjin a chance for a new start, as a new man, and Shadjin took it resentfully, taking with him his wife and son -- Yamino and Koimaru, respectively -- and a couple of cousins and other few clan members who were fooled into Shadjin’s beliefs. These traitors were also erased from Nara clan history.
Once on their own, the small group -- roughly, 7 of them -- adopted the surname ‘Inei’, to finalize their disbandment from the Nara (of course, with Shadjin as their Clan head). Then, they began to build up this newly-found Inei clan.
The first years of the clan were tough. Their small size kept income low and they had no official place of residence, so they bunked in apartments. Fortunately, the strong will (and iron fist) of Shadjin kept them together through the troubling times, and soon, the Inei bore a handful of offspring, who were brought up in what is now the Inei’s official and traditional way of raising Shinobi. With their numbers growing, the clan began to prosper. Their numbers grew, and after years of wealth-building, they purchased the current Inei Estate in Konohagakure.
A few years passed, and the inevitable death of Shadjin began to approach. Most of the clan mourned in advance for the future of the Inei, and for the loss of their great leader -- “Shadjin-shishou,” or “Kage-sama,” as they habitually called him. The activity within the clan slowed down, and most ceased to leave the estate whatsoever as they spent their days grieving, until the fateful day finally arrived, when their master left the earthly realm.
Originally Posted by From a Member’s Journal
After Shadjin's death, the Inei clan became active again only they were different than before. They began to run things more systematically, increasing the daily routine of their members, and becoming quite an intimidating clan. However, the rigorous discipline of the Inei birthed a new generation of Shinobi who were dubbed "The Dark Generation" because of their increased isolation from the world. The physical prowess of the shinobi became exponentially intimidating and powerful, until the Inei became the renowned clan that they are known as today. For them, everything was going well.
However, tensions began to rise between the Inei and Nara, as their shinobi would compete in various ways, which had sprung form an innocent argument of which clan was better. The competition snowballed into a rather treacherous, on-going competition between the the shinobi. This caused trouble for the two clans, who became a bit unstable. In response, the Hokage asked the two clans to bury their hatchets and begin anew. The two clans tried. Unfortunately, they were not able to completely stop all of the resent the clans held for one another, despite the leader's best attempts. They were then forced into a more extreme decision. This was an ultimatum for one of the clans to leave Konoha, since both could not stay there. At first, the two would not agree to the terms, so the Hokage had to choose for them, which due to the better history with the Nara, favored the Nara.
Therefore, most of the members moved to Hachō Village. The move was decided and supported by the Nara clan. Hachō Village was chosen because of it's location within the Land of Fire, as the Inei clan did not want to sever its loyalty and bond with the Leaf and Country, while also being far enough from Konohagakure to ease tensions with their cousin clan.
To continue making Shinobi though, the Head Family stays in Konoha, and whenever a child is of age to enter the Academy, they leave Hachō Village and their immediate family and move-in with the Head Family for the duration of their Academy and early Genin years. Once they become an established enough Genin though, they are given money to find their own place or to go home to Hachō Village. Yes, they force young teenagers to live alone, in an effort to teach them about self-sustenance, self-improvement, and other 'good' qualities. Fortunately, the head family does provide assistance to these Clan Shinobi, should they ask it or in emergencies.
Like the Nara clan, the Inei clan is known for being the only other clan with the Hiden Ninjutsu of manipulating Shadow. Unlike the Nara clan though, the members of the Inei are not known for being Deer tamers or Medically-minded, nor for having any special relations with the Akimichi and Yamanaka clans. Instead, the individual who arise from the clan are usually renowned for their clever cunning, and isolationist and Social Darwinist ideologies. Because of this, most individual in the clan do not marry until their latter years, except for the Village Head and his descendants who marry and bear children in their 20s to make sure their bloodline continues to reign as head. Also because of the ideas upheld from the clan, most members are very competitive and aloof, usually looking out for themselves and other clan members.
Currently, the head of the family is Kuriorō Inei.