History
So how is it formed?
Date back to the 700s, where Buddhism spread throughout Japan, in order to appeal more to the lower classes people, Japanese preachers reinterpreted popular Japanese, Chinese, and Indian stories according to their own doctrines which were later collected and became the basics of some classical rakugo stories.
Through centuries, the Buddhist preacher developed Sermon formulas, providing the storytellers with indispensable technique of narration. It includes chanting, gesticulation, use of metaphors and droll illustration. forming the basics of rakugo's performing style.
Before the late 17th centuries, there were no such thing called rakugo, but some form of storytelling in the street of popular stage hero in kabuki for the lower class who could not afford to watch the real show. As the performance is more defined, a short story ending with an ochi, giving the comical ending, Rakugo was formed, yet the term rakugo is only generally accepted in the later half of the 19th century. Professional halls for rakugo performance were built and rakugo evolve from being just a street performance to also be a place for social gathering, but the main audience was still the commoner.