The Tree Felling Village, later renamed into the Tree Revival Village, is a small and peaceful town once controlled by a dark demon called Black Shadow (影法師, Kagebōshi), who protected the village in exchange for human sacrifices every couple of years. The Tree of Life once stood in this village, but it was cut down by the villagers' ancestors many years prior to the beginning of Naruto Shippūden: Ultimate Ninja 4 because it blocked the entrance to a cave rich with crystals (known as the Crystal Cave), which they figured they could sell to make money.
At one point, a ritual was held in the village in which a brave villager would volunteer to become Black Shadow's sacrifice in order to protect the village. The last known volunteer was a girl named Aoi, whose true purpose was to find a branch from the Tree of Life to cure her sick mother, Tsubaki. The ritual is no longer in place thanks to Naruto Uzumaki, who made it his goal to save Aoi, defeat Black Shadow, and free the village from its nightmare.
A new Tree of Life has grown in the village (once again blocking the entrance to the Crystal Cave) because of a seed from the original, and now the villagers make money by healing the sick via the Tree's curative powers.
Black Shadow was a dark demon whose only weakness was the scent of the flowers that grew around the Tree of Life, which once held the monster in place deep within the Crystal Cave. Once civilisation reached Tree Felling Village, however, the tree was cut down so that people could gain access to the cave and mine for crystals to sell. Because of their actions, Black Shadow was released from his prison and terrorised the village, demanding for human sacrifices, which he was given periodically for the village's sake.
The Tree of Life
The Tree of Life was a magical tree whose leaves and branches had the power to cure any sort of disease, even terminal ones like the one Aoi's mother Tsubaki had. The scent of the flowers that grew around the tree held the demon Black Shadow in his prison for many years, and many of their petals were stored in a necklace passed down in Aoi's family through the generations for protection.
The tree was cut down by the villagers at one point, but another one grew after a seed was found in Black Shadow's stomach upon his defeat.