The Roots of Reiki
Reiki originated in Japan and in recent years the history of Reiki has changed as new facts and information emerge. Please refer to "Light on the Origins of Reiki" by Tadao Yamaguchi as one place for more information. Below is a summary of what I have learned through my teachers.
There are three main people in the story of how Reiki reached the west from Japan.
Mikao Usui (1865-1926)

In his youth Usui sensei had the opportunity to travel overseas though he was not a wealthy man. His travel allowed him to broaden his experience and through his life he worked at many different jobs struggling to make a living. Some of his jobs were as a civil servant, a journalist, a political secretary and even a religious missionary and a counselor working to rehabilitate prisoners.
Usui sensei also studied history, medicine, Buddhism, Christianity, psychology and fortune-telling which enabled him to have a variety of perspectives from which to view the world. He did not like what he saw...finally coming to the ultimate question "what is the purpose of life?"
After much thought he reached the conclusion that the ultimate purpose of life was to attain the state of complete peace of mind or enlightenment. This led him to study Zen Buddhism. However, after practicing asceticism (rigorous self-denial) for three years he could not achieve enlightenment. In desperation he asked his Zen master for advice on how to achieve this peace. His master's reply was that perhaps he should experience death.
Thinking that his life was over Usui sensei retreated to Mount Kurama in March of 1922 and started fasting to prepare for death. During his third week of fasting late one night Usui sensei received a powerful shock in the center of his brain, as if he had been struck by lightening and he lost consciousness. Dawn was breaking when he awoke and to his surprise he felt refreshed, like he had never felt before.
During this incident divine Reiki energy had penetrated his body and soul. As the cosmic energy and his own energy resonated together he came to realize "The Universe is me - I am the Universe". He had finally achieved the enlightenment that he had so longed for and pursued.
He realized the depth of his ability when he ripped off his toenail running down the mountain and having placed his hand on his toe it was completely healed. He was so amazed that he returned home and tried it on his family. Usui sensei felt that he wanted to help others by passing on this ability and after some research he founded the method that enabled him to help others improve their body and mind through Reiki.
He opened a clinic in Kyoto working with the poor people, eventually moving to Tokyo where he started the Usui Reiki Ryoho Gakkai. This means the Usui Reiki Healing Society. He taught classes and gave treatments at his clinic until his reputation as a healer spread all over Japan and he began traveling so that he could treat and teach more people.
He directly taught more than 2,000 students and initiated 16 teachers including Dr. Hayashi in the four years from his enlightenment to his death.
Dr. Chujiro Hayashi (1878-1940)

He was a student of and worked with Usui sensei until he eventually opened his own clinic in Tokyo where he also taught classes.
Over time he became a respected master and many of his students received their Reiki training in return for working in his clinic. He kept detailed records of the treatments that were given, and used this information to create 'standard' hand positions for different ailments.
He initiated 13 teachers including Mrs. Takata.
Mrs. Hawayo Takata (1900-1980)

Mrs. Takata was the daughter of Japanese-born parents who grew up in Hawaii on a sugar plantation. When her sister died she went to Japan to inform her parents and seek medical attention. She suffered from lung problems, asthma, stomach ailments and severe depression. She was completely healed of all illness in Dr. Hayashi’s clinic in Tokyo in 1935 after 4 months of daily treatments.
Between 1970 and her death in 1980 Mrs. Takata initiated 22 teachers.