Byakuren: The tengu of the past used to help out the mountain monks with their training, and would sometimes also take a leadership role during festivals. But then because of the Westernization of Japan, folklore became superstition, shugendou gave way to secularism, and they were forgotten about along with humanity's fear of the dark. The tengu who depended on working together with humans could no longer come outside. For this reason, the existence of the youkai was endangered. This isn't limited to tengu, all youkai were...
Miko: And to deal with that crisis, Gensokyo became an isolated world.
Byakuren: That's right. I wasn't here at the time so I don't know how this came about, but when Gensokyo entered its current state, youkai were released from the spell of human imagination and obtained true freedom. Those whose form was never fixed could now develop their own originality. I don't really understand what kind of transformation occurred, but probably because the tengu were originally a strictly hierarchical youkai, they've built up the kind of society they have now.
Marisa: I get it. To put it all together, in the past youkai's forms were influenced by human imagination, but now youkai have their own originality, is that it?
Byakuren: I believe so. That's why there is currently so much variety among youkai.