Oddly enough, I had just read up about the lore of the tanuki days ago. I'm not much in the mood to paraphrase, nor recall, so I'll simply copy and paste:
The Real Tanuki
The Tanuki is often confused with the badger (ana-guma) and the racoon (arai-guma). It is neither -- it is an atypical species of dog that can grow up to 60 cm. in length, with distinctive stripes of black fur under its eyes. The Tanuki is reportedly native to Japan, southeastern Siberia and Manchuria. Some were introduced to western parts of the Soviet Union for fur farming in the 1950s, and have since spread into Scandinavia and as far south as France. For more on the real-life Tanuki, click here for Japan Times articles.
The Mythical Tanuki
Animals with the power of transformation -- for either benevolent or malevolent purposes -- are called "henge" in Japan. In Japanese folklore, the kitsune (fox) and tanuki are considered masters of transformation, as is the Tengu, the bird-man goblin of the forest and mountain who is revered as the slayer of vanity and pride.
There are countless tales about the mischievous Tanuki. The Tanuki can transform into any living or inanimate shape, but in legend it often assumes the form of a monk or a tea kettle to play tricks on people. Real Tanuki live in the lowlands, forests and mountain valleys, and in legends, the mythical Tanuki is most often shown playing tricks on hunters and woodsmen. They can cast powerful illusions -- they can turn leaves into fake money or horse excrement into a delicious-looking dinner. Like the fox, the Tanuki's powers of transformation are not perfect, for a careful inspection often reveals their true nature (see below stories).
The Tanuki is said to love Japanese sake (rice wine), and is often depicted with a sake bottle in one hand (usually purchased with fake money made from leaves) and a promissory note in the other (a bill it never pays).
Even today, ceramic Tanuki statues can be seen everywhere around Japan, especially outside restaurants and bars, where the Tanuki beckons drinkers and dinners to enter (similar to the role played by Maneki Neko, the Beckoning Cat, who stands outside retail establishments). The beckoning Tanuki is most often depicted with a big round tummy, gigantic testicles, a flask of sake, a promissory note, and a straw hat.
The Tanuki is also known in some localities as Mujina. Indeed, about one century ago, the Japanese court system ruled that the Tanuki and the Mujina were the same species. When hunting of tanuki was prohibited by law, one hunter claimed he was out hunting mujina, not tanuki. The court threw out his case -- that is, he lost the case. (need to find SOURCE)
What About Those Big Testicles?
A curious and defining characteristic of Tanuki is its gigantic testes. According to some legends, the testicles / scrotum can be stretched to the size of eight tatami mats. Others point to the word Senjojiki (the space of 1,000 tatami mats) as an indication of the Tanuki's testes size. Called Kin-tama (Golden Balls) in Japanese, the testes are supposedly symbols of good luck rather than overt sexual symbols (the Japanese are more tolerant of low humor than most Western nations). In the movie Heisei Tanuki Gassen Ponpoko (see below), the Tanuki stretches out its scrotum as a parachute in a desperate suicide attack. In other Tanuki folklore, the Tanuki uses the testes as an impromptu drum, beating out the "ponpoko" sound (no pun intended).
In biological terms, the Tanuki's large "golden balls" are a true depiction of the real-life Tanuki. According to evolutionary biologists, the Tanuki's scrotum is large because of fierce competition among Tanuki males for females. Phrased differently, Tanuki copulate frequently, and those Tanuki with larger testes size have a greater chance of getting their genes into the next generation. The same is true in the world of chimpanzees.
What About the Leaf on Its Head?
The shape-shifting Tanuki is said to put leaves on its heads and to chant prior to transformation. In some legends, the leave is the sacred lotus plant. It is also believed that Tanuki can change leaves into money (as one of them did in Heisei Tanuki Gassen Ponpoko). In the computer game "Super Mario Brothers," when Mario gets a leaf, he gains pointy ears and the tail of a Tanuki.
Tale of Bunbuku Chagama
The Tea Kettle Story
There are many different versions of this legend. In one, a Tanuki is helped by a poor man who saved its life, so the Tanuki turns into a Chagama (tea kettle used in tea ceremony) to help the old man make money. The woodsman sells the kettle to a priest, who in turn orders his assistants to clean it and use it to make tea. The Tanuki-kettle was unhappy with temple life -- it was polished and used on the fire, which really hurt. So it returns to the woodsman, and thereafter makes money for the "woodsman-turned-traveling-entertainer" by dancing as a kettle on a tightrope. In another version, a priest tries to catch a Tanuki to eat for dinner, but the Tanuki escapes by transforming into a tea kettle. The priest carries the kettle back to the temple, but when placed on the fire, the kettle sprouts arms, legs, a nose, and ears, and soon resumes its true Tanuki shape.
Tale of Kachi-Kachi Yama
This story portrays Tanuki as an evil creature. He robs from the field of an old farmer, but is caught by the farmer's wife. To regain his freedom, he lies to her, and once released, he kills her and runs away. But the old farmer, with the help of a rabbit (usagi), avenges her death. In one section of the story, the rabbit and Tanuki are gathering firewood. On the way home, the rabbit tries to set fire to the wood on Tanuki's back. When Tanuki asks the rabbit "What's that sound," the rabbit replies "Don't you know? Kachi-Kachi is the Japanese word for the sound made when using flint to light a fire. In the final scene, the rabbit and Tanuku are having a boat-racing contest, but since the Tanuki's boat was made from mud, it sinks in the middle of the lake, and the Tanuki drowns. The motto of the Shikoku Tanuki Train Line is: "Our ship isn't made of mud."
I hope it answers some of your questions, and that you enjoy reading that, as much as I had.
