Rinnegan

awakening
yahiko first awakened his rinnegan when he went to the soul society and fought gin ichimaru, he was furious and wanted to unleash all of his power when he unexpectedly awakened his rinnegan.

madara has a similar story, he was fighting his final battle with hashirama senju, when he awakened his rinnegan from his eternal mangekyou sharingan, right before he died.

although still unkown how, tobi gave nagato the rinnegan at a young age, and nagato has always used it to protect himself and his friends, jiraiya said that he was meant for great things and the rinnegan would help him along the way.

abilities
the rinnegan is said to be the most powerful of the three great ocular jutsu (byakugan, sharingan and rinnegan). each wielder seems to use it in a different way, nagato uses his to control and see what the six paths of pain do, madara uses his to block or absorb powerful attacks, tobi uses his to control the six paths of tobi and yahiko uses his for the powerful jutsu's and abilities.

the six paths
the six path sage is called that because he can control all 6 paths with out having to use other bodies. nagato also has this ability but only uses it later on when his 6 paths of pain are destroyed.

each path has it's own ability:

deva - the ability to control or manipulate attractive and repulsive forces (push and pull).

asura - the ability to create extra limbs and/or mechanical armor with special mechanical weaponry.

human - the ability to read someone's thoughts and memories simply by touching them, this path also includes the ability to remove someones soul.

animal - the ability to summon various creatures, some are new creations.

preta - this ability allows the user to absorb chakra, and they can take an infinate amount.

naraka - the ability to summon a demon known as the king of hell and use it.

there is also a 7th path, known as the outer path, this path grants the user the power to revive the dead, so far, only nagato has shown to be able to use this path.