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Ryugenzawa is a mysterious valley deep in the wilderness of Japan. Unbeknownst to the local populace, an Orochi dwells in a deep cave at the center of Ryugenzawa. While the beast shares a name and personality traits with the creature of Japanese mythology, it has more similarities in appearance with a Dungeons & Dragons monster known as a Beholder: it has the form of a gargantuan Japanese dragon's head, easily the size of a small hill, with seven smaller, but still tremendous, dragon heads and necks emerging from the back of its skull. Fortunately, the creature spends years or even decades at a time asleep at the bottom of an underground lake, the wellspring for all the water in the valley. The presence of this monster has another strange effect; a powerful magical moss, the Moss of Life, grows on its body and so contaminates the water of Ryugenzawa. For humans, this makes for a powerful curative tonic, though not as powerful as exposure to the Moss of Life itself, but for animals, it has another effect. Animals that regularly drink the Water of Life grow to massive stature.
A nameless family has lived here for generations, waiting for the Orochi to wake so they may force it to slumber again by playing on a whistle made from a horned mongoose's horn, the one thing that can stop it. Even as Ryugenzawa has been abandoned due to the multitude of giant animals that now prowl its depths, the two last survivors of it remain present; a teenaged boy named Shinnosuke and his unnamed grandfather.
The animals that prowl Ryugenzawa are a particularly diverse bunch, consisting of many species native to foreign lands. In the manga, it is explained that a zoo was built here at which Shinnosuke's grandfather was a caretaker, but it was abandoned when they found the animals growing into giants. In the anime, they were exotic pets kept by Shinnosuke's grandfather.
When Akane Tendo was a little girl, her family came on vacation to the area around Ryugenzawa and Akane got lost. She was saved from a giant platypus by the equally young Shinnosuke, who, though she didn't know it, took a potentially fatal wound in doing so. Shinnosuke, unknowing of its true nature, gave her the horned mongoose whistle as a charm to protect her from the creatures of the valley and she escaped back to her family. Shinnosuke, meanwhile, would only be saved by his grandfather's quick thinking and the Water of Life, though even that would prove to be a temporary measure. Luckily for him, Akane Tendo would return a decade later, accompanied by Ranma Saotome and Ryoga Hibiki, in an event that would see the whistle returned, the Orochi quietened once more, and Shinnosuke cured permanently with the Moss of Life.