Chakra is energy extracted from cells that Ninja's need to be able to use Ninjutsu or Genjutsu, to use them correctly the Ninja needs to mix their Chakra with their spiritual energy then use special Hand Seals to activate the technique that they want to use.

A Ninja must train their spiritual energy through battles or special targeted training in order to control large amounts of chakra when using techniques.

Chakra is very similar to the Ki energy found in DragonBall Z.

You may think Chakra is just a made up thing but you would be wrong. There are thousands of sites all about the Chakra energy, If you want to test your own Chakra click here