There are several theories about the origins of ninja, but little to no solid fact. Some people claim that it's because the samurai weren't overly fond of ninja and they were the ones who recorded a good portion of Japan's history. Others say that ninja never actually existed outside of fairytales. But most people agree that if ninja did exist, they probably weren't anything like the Western stereotype.
Despite popular belief, ninja probably didn't completely wrap themselves in black, leaving only the eye area bare. That particular stereotype actually stemmed from a type of Japanese theatre called "kabuki". In kabuki, assistants would always be on the stage to help the actors remember their lines, move scenery, etc. Most people in the audience would know to ignore them, so if a play involved a ninja, it would be played by an assisstant. And, of course, the assisstants always wore black. The outfit commonly associated with ninja isn't practical for anything more than prancing around a stage. The cloth covering the ears would impair hearing and even in the darkest night black would stand out. It's more likely that they would wear dark brown and gray.
Most modern ninja schools (which are pretty far removed from traditional ninja) claim that the original ninjas were actually Japanese Robin Hoods; peasants who learned how to fight and stand up to the aristocracy, or samurai. While this theory seems likely, it doesn't seem to fit with the idea that there were large, exclusive clans of ninja. There are people who are convinced that the ninjas were actually similar to samurai, even going so far as to say that many famous samurai and daimyou (lords) were ninja themselves. This strikes me as highly unlikely, because the very idea of stealth or espionage went against the samurai honor code, bushido. Others say that ninjas were merely skilled assassins and spies that took advantage of the conflict Japan was going through for profit.
The origins of ninja are even more unclear than their lifestyles. There is the theory that the ninjas were peasants who used farming tools as weapons and their knowledge of plant life to make poison. However, that doesn't explain how they learned several other skills they may have needed to know. For example, it would be difficult for some one who'd never left the rural village they'd grown up in to pretend to be a rich merchant or whatever the mission may call for. The theory that some samurai were ninja also has several holes in it. Why would some one take to the time to develop techiniques for guerilla warfare when they were taught since childhood that any fighting that wasn't face to face was dishonorable (and honor was something that almost every samurai would die for in a second).
Samurai were the only group of people with the means and incentive to hire ninja, but it's hard to understand why samurai, who valued honor and supposedly despised ninja, would use them. If ninja didn't get money or some kind of reward it wouldn't make much sense for them risk their lives by sabotaging the attempts of some lord to gain power. According to some theories, ninja were simply trying to manipulate politics for their benefit. For a medieval Japanese farmer, the transfer of land from one lord to another was probably just a change from tyrant to tyrant. So this supports the claim that they were samurai, which ,as I already pointed out, doesn't make any sense. In all likelihood, assuming that ninja did exist, samurai probably gritted their teeth and decided that the ends justified the means.
Another subject up to debate is the fall of ninja. It's entirely possible that the practice of ninjutsu (the technique used by ninja) became less popular at the end of the feudal era and, as a result, wars that made them useful. Another likely theory is that they were eventually killed off by samurai who feared that they would become too powerful. However, there are those who say that ninja were used by both sides during the Civil War that led to the beginning of the Meiji Era (1868-1912) and modern ninja schools claim that the techniques they teach have been in existence for centuries. So, it's also possible that ninja never entirely died off.
There is a great deal of mystery surrounding ninja and how they came to be. While it's impossible to know exactly where they came from or what happened to them or even what they did when they were around, I've done my best to atleast narrow down the possibilites.