The hyaku-monogatari (“one hundred stories”) were told in Edo-era Japan when people came together to exchange kaidan, stories of ghosts, monsters, mysterious (fushigi) happenings, and frightening (osoroshiki) characters. This gatherings, hyaku-monogatari kaidan kai, can be conceived of as a kind of market for exchanging stories. These might be real (or claimed) personal experiences, stories people knew from elsewhere, or a story of their own devising. There may not always have been exactly one hundred stories; as in English, saying there are “a hundred” or “hundreds” of something can be deliberate hyperbole, just a way of saying there are more than you can easily count. Stories of mysterious and frightening things (mononoke) were and are indeed endless in number.
Wakan kaidan hyōrin, 1718:
“First light one hundred wicks with blue paper around them, and hide all weapons. Now, for each frightening tale, extinguish one wick… when all one hundred flames have been extinguished, a monster (bakemono) will most definitely appear.”
Hide all weapons! The theatricality of the slowly gathering darkness as the tellers vie with each other to tell the scariest story speaks for itself, I think. The ritualistic repetition also plays a part in creating an immersive experience in which we allow ourselves to be scared. Try it! In fact I already used the techniques of the hyaku-monogatari kaidan kai directly in my own live show about occult stories and supernatural folk beliefs in Tudor England, Magickal Realism.
The popularity of the (by definition ephemeral and oral) hyaku-monogatari also contributed to a publishing boom as the best stories began to be collected and made available in print, making an enthusiasm for monsters and supernatural beings (妖怪 yōkai) the national Japanese pastime that it remains today. As for the yōkai themselves, it’s a huge subject with no shortage of English-language resources available online.
Source: Pandemonium and Parade– Japanese Monsters and the Culture of Yōkai by Michael Dylan Foster.
PS Semi-related, daft and entertaining, Denki Groove– モノノケダンス (Mononoke Dance):