One of the best sword museums and sword artisans communities can be found in Okayama Prefecture

Bizen Osafune Sword Museum and Craft Center is located in Setouchi city, Okayama Prefecture. Just a short train ride from Okayama station to Osafune station and a 10 minute taxi ride for 500yen to the museum. You can walk to the museum (it takes about 25 minutes) but if you are unfamiliar with getting around in Japan and still have not mastered reading some Japanese then the taxi is the best option.

Once you arrive at the museum you can easily get your bearings and decide to either look around the craft village where swords artisans are busy working on making each specialty part that makes up a Japanese sword or you can enter the museum to see great examples of different swords or knifes crafted centuries ago.

Here are a number of more detailed articles on the museum;

http://en.japantourist.jp/view/osefune-sword-museum
http://en.japantourist.jp/view/the-sword-and-okayama
http://en.japantourist.jp/view/the-shape-of-the-sword
http://en.japantourist.jp/view/osafune-sword-museum-gift-shop

What is really unique about coming to Okayama is that you can watch the whole process of sword making and you can even get a custom-made sword produced for you. Okayama prefecture now has the largest community of sword artisans left in Japan, and they continue to practice the traditions from centuries past in creating modern swords.