Gion is Japan's prime geisha district and consequently also Kyōto's most famous (and best preserved) traditional neighbourhood.
Gion originally developed as a place to accommodate the needs of travellers and visitors to the nearby Yasaka-jinja Shrine. Things changed quickly and Gion's machiya (town houses) and ochaya (tea houses) turned into exclusive establishements for wealthy customers. The principal patrons became samurai, then modern corporate leaders.
Geisha, literally "person of the arts", entertain their customers with traditional music and dances as well as with their witty conversation. They could be regarded as the refined, traditional equivalent of bar hostesses. Gion's geishas are usually called geiko. An apprentice geisha is a maiko.
The Gion neighbourhood is located on the eastern bank of the Kamo-gawa River, on both sides of Shijō-dōri Avenue as far as Maruyama Park.
Crossing the bridge over the Kamo River on Shijō-dōri, you will first set eyes on the Minami-za theatre, Japan's oldest Kabuki theatre.
Hanami-koji, perpendicular to Shijō-dōri is where most of the 17th-century wooden teahouses are to be found. Geisha or maiko sometimes wander through the streets during the day, but you will have more chances to see one between 5pm and 6:30pm, before they start working.
There are more old beautiful teahouses on Shirakawa Minami-dōri and antique shops on Shinmonzen-dōri, which both intersect Hanami-koji.
At the end of Shijō-dōri, near the Yasaka-jinja Shrine, Gion Corner and Gion Kobu Kaburen-jo Theater have various traditional dances. The most famous are the Miyako Odori in April, where maiko perform dances in honour to the coming of Spring.
The area north of Shijō-dōri has a more modern feel, not unlike the most select of Ginza's hostess bars. The rich and powerful come here in the evening and are greeted by hosts in tuxedo and geisha in kimono, or hostesses in expensive evening dresses. You won't see much during daytime and at night you won't be allowed to entered anywhere without a high connection. The yakuza-like atmosphere will probably not make tourists feel very comfortable there anyway, so you could just skip it altogether.