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Budō is a compound of the root bu (:ぶ), meaning "war" or "martial"; and (:どう; tao in Chinese), meaning "path" or "way" (including the Buddhist conception of "path", or mārga in Sanskrit). The term refers to the idea of formulating propositions, subjecting them to philosophical critique and then following a "path" to realize them. signifies a "way of life". in the Japanese context, is an experiential term, experiential in the sense that practice (the way of life) is the norm to verify the validity of the discipline cultivated through a given art form. Modern budō has no external enemy, only the internal enemy, one's ego that must be fought.

Similarly to budō, bujutsu is a compound of the roots bu (武), and jutsu (術:じゅつ), meaning technique. Thus, budō is translated as "martial way", or "the way of war" while bujutsu is translated as "science of war" or "martial craft." However, both budō and bujutsu are used interchangeably in English with the term "martial arts". Budo and bujutsu have quite a delicate difference; whereas bujutsu only gives attention to the physical part of fighting (how to best defeat an enemy), budo also gives attention to the mind and how one should develop oneself.