"Otogizoushi" is a historical fantasy anime set in two distinct time periods: Heian-era Japan and modern-day Tokyo. The narrative intertwines supernatural elements with political intrigue, blending folklore and historical events. The first arc, "The Capital Chapter," takes place in 11th-century Kyoto during the Heian period. Minamoto no Raikou, a noblewoman and skilled archer, is tasked by the emperor to retrieve the legendary Magatama, a mystical jewel said to bring peace to the land. Accompanied by her loyal retainer, Watanabe no Tsuna, and the enigmatic onmyouji Abe no Seimei, Raikou embarks on a perilous journey. Along the way, she encounters yokai, spirits, and rival factions vying for control of the Magatama. The arc explores themes of duty, sacrifice, and the blurred lines between good and evil, culminating in a climactic battle that reshapes the fate of the capital.

The second arc, "The Tokyo Chapter," shifts to contemporary Tokyo, where the Magatama resurfaces, drawing the attention of various individuals connected to its ancient power. The protagonist, Hikaru Kamishiro, a young woman working at a publishing company, becomes entangled in the mystery when she encounters Tsuna, who has inexplicably survived into the modern era. Together with Seimei, who also reappears, they uncover the Magatama's influence on the city's spiritual balance. The modern arc mirrors the first in its exploration of moral ambiguity and the consequences of wielding power, as Hikaru and her allies confront both human and supernatural adversaries.

The series is notable for its dual narrative structure, which contrasts the historical and modern settings while maintaining thematic continuity. Raikou and Hikaru serve as parallel protagonists, each grappling with their roles in a world where the past and present are inextricably linked. Supporting characters like Tsuna and Seimei provide depth to the story, with their motivations and relationships evolving across both timelines. "Otogizoushi" combines action, mystery, and folklore, offering a layered tale that bridges centuries and explores the enduring impact of myth and legend on human destiny.