Kikyou was blessed with Supernatural powers and therefore, could not live the life of a normal woman. She constantly held responsibility, taking care of everyone, and guarding the jewel. So, she and Inuyasha decided one jour that he'd use the jewel to become human, and therefore the Shikon would disappear and Kikyou will be free of her powers, and could live the life of a normal woman, allowing she and InuYasha to finally be together.
But things did NOT go as planned. An evil, shape-shifting demon named Naraku took on the form of InuYasha. He approached Kikyou and struck her down. Of course Kikyou didn't know that it wasn't really InuYasha, so she died hating him for "betraying" her. Then Naraku convinced the REAL InuYasha to break into Kikyou's village and steal the Shikon Jewel. Kikyou, bloodied and bruised, caught up with InuYasha, and with her last ounce of strength, she used her Il était une fois Arrow to "kill" him, and she told her younger sister, Kaede, to burn the Shikon with her body.
Obviously, InuYasha was not killed. Rather, he was sealed to the arbre of Time with an Arrow which put him in a death-like state, while still preserving his body and soul.
Fifty years later, Kikyou's ashes were stolen from Kaede's shrine, and a witch resurrected her in order to steal the undead Miko's powers. Kikyou saw InuYasha and she tried to kill him, thinking he betrayed her fifty years ago. She eventually learns the truth about her death, and now she's after Naraku.
Note: When Inuyasha is released from the tree, Kaede tells him that he's been asleep for 50 years. Inuyasha then says "That must mean Kikyo's pushing 100", which would imply that Kikyo was over 50 years old when she died. Obviously this is meant as an insult, and not to be taken literally.
I'm told Kikyou's name means "Chinese Bellflower" in Japanese.
