Rinnegan is the blood inheritance limit of Rokudou Sennin (Six Realms Sage) and his descendants. Rokudou Sennin was viewed as the original shinobi and his Doujutsu was regarded as the most venerable of the three great Doujutsu. As the original shinobi it was said he created modern Ninjutsu. The Rinnegan was regarded as a god of creation when the world was racked with chaos and as a weapon of destruction which could return everything to nothingness. Usage of the Rinnegan was said to give the user mastery over all six forms of chakra nature manipulation.
The true extent of the Rinnegan abilities are currently unknown. Rain orphan Nagato was an inheritor of the Doujutsu, and used it unconsciously when he was angry and afraid. He entered into a berserk state which allowed him to defeat a much stronger foe. It may be this same ability which allowed him to never lose a battle as "Pain," the leader of the
Nagato's ability to switch between these host bodies probably gives rise to the "Transmigration" name. This is a cycle of reincarnation and rebirth seen in Hinduism and Buddhism. There are six states of rebirth in the cosmology, representing all the good and bad possibilities of life.