Sake is a Japanese alcoholic beverage made from fermented rice. Though sake is commonly viewed as a rice wine, it is actually more akin to beer. Wine is made from a single fermentation of juice from fruits such as grapes and berries. Sake (and beer) is made from a multiple fermentation of rice.
In Japan, the word nihonshu is used to specifically refer to this beverage. The word sake has a broader meaning. In the western world, we usually use the word sake to refer to the beverage.
Sake can also refer to a distilled beverage in southern Kyushu called shochu. Sake can also refer to shochu made from sugar cane in Okinawa.
There is no conclusive evidence as to where or when sake originated. Our best guess is that sake (in early forms that we would not recognize today) may have appeared around 200 or 300 A.D. in China and Japan. The alcohol content of this sake was much less than today's sake, and it was eaten like a porridge instead of consumed as a drink.
Around 700 A.D., sake started to resemble what we drink today. During this time the brewers learned how to increase the alcohol content so the sake would not spoil as quickly (no refrigeration, remember).
Brewers continued to improve their methods and by the 20th Century, sake brewing was quite advanced. Wooden barrels were dispensed with in favor of enamel or stainless steel tanks. This cut down on bacterial problems that plagued the wooden barrels.
Sake started to be taxed in Japan. You could still homebrew sake tax-free, but that ended during the Russo-Japanese War in 1904. The government banned home brewing so that people would buy more commercially produced (and taxed) sake. Home brewing sake is still banned today.
Sake is brewed from a fermentation of polished rice. The rice is milled down so only the starchy core remains. The outer hull which contains proteins and congeners is removed. This results in a more pure starch to be fermented. Usually, the more the rice is milled, the more desirable the sake is.
Since starch won't ferment into alcohol on its own, it is broken down into simpler sugars by enzymes from a mold called koji. This is akin to malting barley in the beer making process. While the koji is breaking down the starches into sugars, yeast is consuming the sugars producing alcohol. This happens simultaneously and is called multiple parallel fermentation. With beer, the malting (breaking starches down) and fermenting (converting sugars to alcohol) happen separately.
There are three basic methods for brewing sake.
There are two basic quality classes of sake: futsu-shu, or "normal sake", and tokutei meishoshu, or "special designation sake". About 75% of sake is in the futsu-shu class. This sake is cheaper and is either drunk or used in cooking. The more expensive tokutei meishoshu sake is usually superior in quality, and falls into four different designations.
The term junmai can be added in front of ginjo or daiginjo (junmai ginjo or junmai daiginjo) to signify a ginjo or daiginjo with no added alcohol.
These four grades of sake have some overlap, and don't assure a certain level of quality or flavor profile. As always, the skill of the brewer and quality of the ingredients play a part.
Note, because the United States taxes alcoholic beverages that contain even a small amount of distilled alcohol at the higher distilled beverage rates, importing non-junmai sake into the U.S. is usually cost prohibitive. So it is tough to find non-junmai sake in the U.S.
These variations can be combined and apply to any of the brewing methods above. For instance nama genshu would be undiluted, unpasteurized sake.
There is no set, specific rule on what temperature to serve sake, however there are some general guidelines. High quality sake is usually served slightly chilled or cool. Cheaper sake is usually warmed or served hot. This can mask some of the undesirable flavors. These are just guidelines, and you should be free to experiment to find your own preferences. For instance, good ginjo sake can be wonderful when slightly warmed during the winter.
Sake is served in small cups called choko. You can pour from the bottle or use a ceramic container called a tokkuri.
You should store sake like wine -- in a cool, dark place. Most sake should be consumed within three months. After opening the bottle, sake will not last long. It will oxidize within a matter of hours. If you have to store an opened bottle, seal the bottle and put it in the refrigerator. Drink the sake within a day or two.