One thing which is oft forgotten is the importance of religion in fedual times. In Europe there was Christianity. In Japan a Buddist / Shinto mix.
I don't really think anybody is forgetting that. As far as Europe goes, Catholicism dominates under the Pope for most of western history driving many of the main events - establishing the Holy Roman Empire, the Crusades, even the religious wars during the formation of Protestant Reformation. In a sense individual sovereignties fall either under direct control of the church, at least until the rise of nations and republics at the end of the medieval/renaissance period.
I can agree that many representations of Japan in RPGs kind of hand-wave religion, often including aspects of Shinto in some form or other, but almost never delving into concepts of Buddhism. My development of the Kaidan setting of Japanese horror (PFRPG) has included a much stronger presence and development of both Buddhist and Shinto concepts more directly into the structure of the setting itself. Even the cosmology of Kaidan differs from the rest of standard D&D/PF universe.
The basic gist of Buddhism is that all beings are trapped in an endless cycle of reincarnation, unless one can shrug material things and follow a strict practice of rites that helps one achieve enlightenment - in order to gain the state of Nirvana, a kind of spiritual perfection, and escaping the reincarnation cycle. Kaidan cosmology incorporates the social caste system with the additions of non-humans and hell itself as the body of the reincarnation cycle - the states of being one achieves in the reincarnation process, at PC death comprise the cosmology of the setting. Rather than calling it Buddhism, in Kaidan its called Zaoism - which is kind of a contraction of Zen and Taoism, as it is not strictly purely realworld Buddhism, but much closer than any other oriental settings relationship to that religion. In Kaidan you don't just hand-wave Buddhism, it is intrinsic to the setting.
Unlike many RPG settings of Japan analogs, Kaidan's treatment of Shinto is really not comparable to polythiestic structures like typical D&D/PF settings - as it has been treated in most previously published Japan analogs. While Shinto tradition indicates their are 8 million kami spirits, this is really just a way to describe an infinite number of such beings. So instead of named list of the major dozen or so deities or near deity spiritual beings, in Kaidan there is literally an infinite number of beings, though many are named, many are not. Shinto primarily comprises nature spirits of animistic behavior, though it also includes the spirits of deceased living beings, and the deification of the emperor as part of bloodline of major deities of the Shinto religion. Kaidan relies more on the nature spirit aspect, and that each spirit is bound (by choice) to unique locations of natural beauty as a kind of portal between the spiritual realm and the land itself. Any place of natural beauty such as waterfalls, canyons, rocky islets along the coast, holy mountains, holy rivers distributed across the land are the bound portal areas inhabited by such spirits. Kannushi are Shinto clerics that have the unique ability to change one of its domains to whatever local spirit has influence. These local spirits region of control is limited to a few miles from their earthly portal area. When kannushi move from location to location, they must attempt to commune with each local spirit and appease it to gain spellcasting powers in that region. Of course, Kaidan calls its version of Shinto, something else. Since in Kaidan this belief system was first adopted by the yokai (animal based sentient beings - hengeyokai, kappa, kitsune, and tengu), it is called Yokinto (so as not to adopt the actual named religion).
Kaidan is considered a very esoteric setting because of its reliance on the spiritual nature of Shinto and the reincarnation structure of Buddhism - it isn't just hand-waved, rather its entirely dependant on those religions.
