Hinata is the daughter of Hyuuga Hiashi of the Hyuuga clan, formed by those who possess the Byakugan, an eye ninjutsu that enables its user to see everything at at 359° range.
Byakugan users can also see the chakra points of their enemies, thus developing a close range Palm Fist style of fighting that allows them to close each point, leaving the person unable to mold chakra, either temporarily or indefinitely.
But things hadn't been easy for Hinata. From the very beginning, she was despised by her father for being weak and lacking self-confidence, whereas her little sister Hanabi and her cousin Neji were wayyy better in ninjutsu and fighting.
Hinata is the heiress of the Main Family and she is meant to be the leader of her clan one day, while Neji forms part of the Branch (inferior) Family, and he is meant to serve and protect the Main Family. Given that his father Hizashi had to be sacrificed in order to protect the secret of the Byakugan, taking his twin brother's (Hiashi) place, Neji developed hate and resentment towards Hinata.
This was revealed when Hinata and Neji had to fight during the Chuunin exams. Neji was considerably stronger and bullied Hinata all the way, at the point of almost hitting her with KI (Killer Intent). This pisses off Naruto, who cheers for Hinata.
But Hinata stood up after receiving all Neji palm fists techniques and says she's sorry for him. She's left badly injured, and Naruto steps to the plate and defies Neji to a duel. There's quite an empathy between Naruto and Hinata, given that they're both seen as losers and underdogs for not being perfect at ninjutsu for their age.
