Watari is a tale of a young Iga ninja boy in feudal Japan, and seems to be a children adventure film, although the plot is surprisingly complicated (internal ninja intrigues and laws) and there is a considerable amount of blood and death and even several dead children, something one would rather not except from such type of movie.
My reception of this film may be distorted, as I'm a huge fan of most things ninja, but I greatly enjoyed the movie. The plot is captivating albeit a bit confusing, and the lead child actor seemed to be to be really good in the titular character's role. One point of special notice is an use of a battle axes (including by Watari), something I don't recall from any any other samurai-era picture.
One thing kept bugging me through the movie: the film is from 1966 and it really shows in its use of special effects in the presentation of ninpo ("ninja magic") lore, which by the todays standards are just really bad. Some sequences are also really trippy and just plain silly, (with the rainbow scene I thought is like Sesame Street on LSD and this with the giant enemy resembling something by the Monty Python group), and another literally cartoonish and also very odd. Not enough to deter a ninja nut like me, though, and it's just several minutes in total.
There's apparently a sequel called The Magic Sword of Watari.
Also thanks for Ninja80 website for directing me to this movie.