Midoriko

is a minor character in story of InuYasha, but has a huge impact on the overall plot.

History
Midoriko was a miko centuries before the events of the series, when the shoguns served as de facto rulers over most of Japan. As a priestess she was well known for her immense spiritual powers and abilities,more specifically her ability to purify a yōkai souls and spirits, rendering them powerless. It was because of this power that Midoriko was both hated and feared by demons.

In her final battle, Midoriko was ambushed by many yōkai. The battle lasted for seven days and nights and eventually a yōkai, created from the possession of a mortal man, who secretly desired Midoriko, by many yōkai, got her in its jaws. Midoriko, in one final attempt to defeat the yōkai, forced out the yōkai's soul and her own soul from their respective bodies. Both yōkai and Midoriko died, but their souls combined to create the Shikon no Tama. Midoriko and the demon remained imprisoned within the Jewel and continue to battle, until Kagome made a wish to make the Jewel disappear forever, allowing Midoriko's departed spirit to move on to the afterlife at long last.

During the Story
Although many years have passed, her body exists (in crystallized form in the anime, as a mummy in the manga) in the Yōkai Taijiya Village (The Demon Slayer Village). She made a cameo, in which she saved Myōga (however, it could just have been Myōga seeing things). It is said that Midoriko and yōkai are still fighting inside the Shikon Jewel.

As the story continues, her soul and the yōkai were split from the Sacred Jewel, as it had intentions to use Naraku, Kagome, and Kikyo instead. However, she and the yōkai were finally banished when Kagome wished for the Shikon no Tama to disappear forever.

In the manga, what became of Midoriko was never shown. However, in the anime series, after Kagome makes her wish, Midoriko ceased her fighting and disappeared along with the demons she fought, implying that her battle had finally ended and she was allowed to move on.

Powers and Abilities
As a priestess, Midoriko had extremely high power-levels of spiritual power, strength and energy. She was also thought to have the equal strength and power of one hundred samurai.
 * Purification Abilities: Midoriko was capable of infusing her exceedingly strong and powerful spiritual powers and abilities into her sword and purify twenty demons at once.
 * Spiritual Possession: Midoriko had the amazing power and ability to possess a person.
 * Enhanced Stamina: Midoriko had extremely high stamina as she was able to fight many demons (who had all merged into one single demon named Magatsuhi) for seven days and seven nights with out needing to rest.
 * Spiritual Powers and Powers: Midoriko had exceedingly strong and powerful spiritual power and abilities. Her spiritual powers and abilities alone could purify hundreds and hundreds of demon souls and spirits all at once, thus rendering them utterly powerless and harmless.

Weapon

 * Sword: She is seen carrying and using a large sword as a weapon, it could be that she had infused her immense spiritual power and ability into her sword to slay demons.

Manga vs. Anime

 * It is hinted that Kirara fought by Midoriko's side in the anime, while in the manga, it had made no hints towards this.
 * In the manga, Midoriko's fate after Kagome made her wish for the jewel to disappear forever was never shown. In the anime series, after Kagome makes her wish, Midoriko ceased her fighting and disappeared along with the demons she fought, implying that her long battle has finally ended and she is allowed to move on.
 * In the anime, InuYasha, Kagome, Shippo, Miroku, and Myoga are unable to enter the cave and they only can get in after Sango tells them how. In the manga, they are able to walk in without her.

Trivia

 * Midoriko probably lived somewhere between 1203 and 1333 when the shoguns and their shikken regents were at the peak of their power.
 * Despite being responsible for the whole story of InuYasha (she was responsible for the existence of the Shikon Jewel), she has a really minor role in the actual story.
 * In the fourth movie "Inuyasha: Fire on the Mystic island," the clothing that the fake Kikyo is wearing looks very similar to Midoriko's clothing.
 * Midoriko is the only priestess shown in the story that wields a sword. Not counting the Kikyo in the fourth movie, as she was a clone.