I haven't seen anyone really expand on to the fact that the mother of The Sage of Six Paths, Hagoromo, was a princess and what the implies. So I thought I'd go outside of my norm and actually make a thread....
I think Hagoromo became a sage because after his mother died the tree became the Juubi and was actually after the chakra she stole still left within her son. Fearing it would endanger the kingdom he left to keep them out of danger, and to learn to use the chakra he had as a more efficient and powerful weapon and eventually defeat it. The Ootsutsuki family were the rulers of the Great Kingdom, when the heir apparent left to be a hermit, it left a void in the power structure which allowed Kaguya's immediate family an opportunity to seize it. If history has taught us anything, some lesser-members of a ruling family are quick to try take power for themselves when opportunities arise.
The Sage began teaching people how to use chakra and ninjutsu in order to defeat the Juubi, and instead of reclaiming his throne he continued increasing and spreading his knowledge and skill. His students, the proto-shinobi, began forming clans probably to better their jutsu as well. Different Ootsutsuki family members began bringing these clans under their fealty. I believe this was the start of a new war as the Ootsutsuki family began in-fighting and claiming territory for themselves. I think Hagoromo felt responsible for this, since he taught the art of ninjutsu and didn't take control of the Great Kingdom, which is the wrong path he was talking about here:
It's also why he chose his younger son to be his heir as he wanted to unite the kingdom with love instead of more fighting:
Eventually these waring factions continued fighting until only 5 factions of the Great Ootsutsuki Kingdom remained, becoming the 5 Great Shinobi Countries. The descendants of the Ootsutsuki are actually the daimyo who rule these nations.
My Theory's Manga Foundation:
As Madara stated here before Princess Kaguya had eaten the fruit, what we know now as the Shinobi World was wrought with war. After which, she stopped the war all on her own.
Now here's where her title brings in some interesting implications. As a princess she came from royalty, as such her family ruled a kingdom or nation, and when she ended the war all must have fell under her rule. Which means there was a single great kingdom that ruled at that time.
I think this page gives several subtle implications:
1) Kaguya had only one son of note.
2) That single child became a hermit/sage, which means he left society to train and hone his abilities
3) Kaguya wasn't around to stop the Juubi as it was left to her son.
4) Chakra isn't something just given by Shinju, there is a secret to unlocking chakra. Hagoromo probably became a hermit so that he could learn how to teach this secret, and created ninjutsu to increase his natural abilities, all to stop the Juubi.
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1) Kaguya had only one son of note.
2) That single child became a hermit/sage, which means he left society to train and hone his abilities
3) Kaguya wasn't around to stop the Juubi as it was left to her son.
4) Chakra isn't something just given by Shinju, there is a secret to unlocking chakra. Hagoromo probably became a hermit so that he could learn how to teach this secret, and created ninjutsu to increase his natural abilities, all to stop the Juubi.
The Theory
I think Hagoromo became a sage because after his mother died the tree became the Juubi and was actually after the chakra she stole still left within her son. Fearing it would endanger the kingdom he left to keep them out of danger, and to learn to use the chakra he had as a more efficient and powerful weapon and eventually defeat it. The Ootsutsuki family were the rulers of the Great Kingdom, when the heir apparent left to be a hermit, it left a void in the power structure which allowed Kaguya's immediate family an opportunity to seize it. If history has taught us anything, some lesser-members of a ruling family are quick to try take power for themselves when opportunities arise.
The Sage began teaching people how to use chakra and ninjutsu in order to defeat the Juubi, and instead of reclaiming his throne he continued increasing and spreading his knowledge and skill. His students, the proto-shinobi, began forming clans probably to better their jutsu as well. Different Ootsutsuki family members began bringing these clans under their fealty. I believe this was the start of a new war as the Ootsutsuki family began in-fighting and claiming territory for themselves. I think Hagoromo felt responsible for this, since he taught the art of ninjutsu and didn't take control of the Great Kingdom, which is the wrong path he was talking about here:
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