As time went by, Shinichi expanded his influence and founded bases outside Konoha and formed a secret underground organization and named it Hikari.
Shinichi designated 10 clones to each base for management and defense. Shinichi started expanding the area controlled by Hikari by defeating local lords and purging criminals that are present in the society. This brought peace to normal people. After that, Shinichi provided civilians with safety, basic rights, and development. As such, rumors spread, and then more civilians from other places started to migrate toward the lands controlled by Shinichi.
Shinichi took advantage of his control over the land and founded companies that produced products spanning across all the needs of a normal person. It also provided normal people with jobs. Shinichi starts exporting a variety of products outside of Hikari. The areas controlled by Hikari started becoming rich and the center of the economy.
When the Daimyo came to know about Hikari, he ordered Konoha to attack areas of Hikari and deal with it.
Hokage's office,
Minato: Sandaime-sama, the Daimyo wants us to attack Hikari. Hikari has not been hostile with Konoha. Contrary to that, Hikari exports its products to Konoha, and our people consume the products. We also earn from taxing the products. If we attack Hikari openly, then it will be the same as declaring war.
Sandaime: Minato, if we can't attack Hikari openly, then we have no choice but to attack secretly and deal with Hikari.
Minato: Sandaime-sama, the problem is that we don't know much about them. Every time we sent ninjas to gather information, they came back with the information about civilian prosperity and justice. There are 10 elders at the top for each area, and they are said to be very powerful. Some of our ninjas tried to sneak to their mansion, but they were not present there at any time. It's as if they are controlling everything while being hidden.
Minato: Also, all the officials in Hikari are either civilian ninjas or normal civilians.
Sandaime: Minato, we should send ninjas that appear as normal civilians, and when they find said elder, they assassinate them one by one.
After that Every time Konoha sent ninjas, they disappeared without a trace. Kakashi was also one of those ninjas that disappeared.
As Konoha's manpower kept declining with each attack, Konoha started ignoring Hikari.
Minato replied to the Daimyo about what is going on. Daimyo forced an order to go attack Hikari with full strength. Minato and the Elders of Konoha decided to ask the Daimyo to also provide some military assistance. A troop was formed that went to attack Hikari and disappeared. After that, Daimyo and Konoha started ignoring Hikari.
After a month, the troop that had been sent to attack Hikari and had disappeared came back to Konoha.
Hikari is now controlling the western half of the Land of Fire, the area that had been controlled by the Daimyo. Konoha became a village on the border of Hikari and the Daimyo's area.
Hokage's office,
Minato: Where were you? I had sent you to attack Hikari?
Riko: Yondaime-sama, the Hikari is too powerful. They captured our whole troop, and we don't even know how. They released us and said that even if we attacked again with more men, we could not do anything to Hikari.
Minato: Sandaime-sama, they are alive. That means the ninjas we sent earlier might also be alive. Kakashi might also be alive!
Sandaime: Minato, don't make any hasty decisions. We need proper planning to deal with Hikari.
(But no one in the room knew how to deal with Hikari, so everyone went silent and left.)
(Shinichi is now 4 years old.)