Indeed.
Lafcadio Hearn is to this what Bullfinch is to Greek Mythology.
Lafcadio Hearn's first story in this Kwaidan: strange occurrences collection of Japanese stories published in 1899, Mimi-Nashi Hoichi (Hoichi the Earless) was the inspiration story behind Kaidan. In that story a blind religious bard and biwa player visits a temple and is invited into a noble's gathering, but turns out to be a cemetery for the losing side in the Genpei War (he's blind and doesn't realize it). The story of the fall of the House of Taira in the final battle of the Genpei War - is the event that leads to the formation of Kaidan.
April 5, 1185, at the straits between the main island of Honshu and the island Kyushu is where the final battle of the Genpei War takes place, a naval engagement. The Taira had forces at the sea and on land, as well as the Minamoto. At first the tide was against the ships of the Minamoto, but then the tide changed and they had the advantage. One of the Taira generals on shore, turned himself in to the Minamoto and revealed that the Taira imperial house was aboard one particular ship and pointed out which one it was. So the forces of Minamoto showered arrows onto that ship killing all on deck. Running adrift the imperial house of Taira came up from below deck, and opted not to surrender, rather the boy-emperor's grandmother carried him in her arms (my invention here) she uttered "How terrible that the rightful emperor, Antoku, my 5 year old grandson is beaten by the barbarians of Minamoto. If the world were right, he and the royal house of Taira would rule forever." Then she leapt into the sea with Antoku in her arms, and the rest of the house followed them into the waves.
Emma-O, lord of Jigoku (Japanese hell) hears this delicious dark wish consummated by the suicide of an entire noble house, was too inviting, so he created Kaidan, to replace the Japan that the Taira once ruled. Although they drown, but are pulled from the sea and recovered in awaiting boats that take them to the shore, but it's not Japan. They are now ghosts trapped in Kaidan to rule it as their empire forever...
Kwaidan was Hearn's mispronunciation of the word, which should be Kaidan - which means "ghost story". It was part of 14th century ghost story telling game called "Hyakumo monogatari kaidan kai" which mean's "a collection of 100 ghost stories". As a test of mettle a dozen samurai participate. A circle of 100 candles are lit and the participants enter the circle. And each one, one at a time tells a ghost story or creepy tale, and at it's completion blow out a candle, each participant will tell multiple stories. Once all the candles are extinguished, it is said that a blue demon will visit and select one of the participants to take with her to Hell. (Kind of a Bloody Mary ritual). Often the samurai get freaked out and jump out the circle before the completion and they lose. The last one is the winner.