Kana is a general term for two types of syllabic Japanese script: hiragana (ひらがな) and katakana (カタカナ). These were developed as an alternative and adjunct to ideograph based characters of Chinese origin, or Kanji (漢字).
Katakana is used to write foreign names and foreign words that have become a part of the Japanese language. For example, United States President George W. Bush can be expressed as ジョージ・W・ブッシュ (middle initials of Western names generally use the Roman alphabet.)
Hiragana is mostly used to indicate grammatical aspects of the language. It is also used to represent an entire word (usually of Japanese, rather than Chinese origin) in place of kanji.
Hiragana can be written in small form above or next to lesser-known kanji in order to show pronunciation; this is referred to as furigana. Furigana is used most widely in children's books; however, literature aimed for young children with little knowledge of kanji may dispense with it altogether and use hiragana combined with spaces instead.
Kana is traditionally said to have been invented by the BuddhistpriestKukai in the 9th century. Kukai certainly brought the Siddham script home on his return from China in 806; his interest in the sacred aspects of speech and writing led him to the conclusion that Japanese would be better represented by a phonetic alphabet than by the kanji which had been used up to that point.
The concept of phonetic characters existed before as Kanji phonetics known as Man'yōgana;. Man'yōshū, a poetry anthology written in 759, is written in this early script.