Watanuki was born with a strange gift - the gift to see spirits, spirits who are drawn to his blood and haunt him constantly.
Watanuki’s parents died when he was young, and he has been living on his own when he meets Ichihara Yuuko, the time-space witch. He is pulled into her shop against his will, seemingly, and immediately conned into giving away his father’s watch. She teaches him of hitsuzen and offers to grant his wish - to not see spirits - for a price: he must work off the price of his wish by being her servant. He doesn’t appear to be given much of a choice in the matter, but it remains that it was Watanuki who made the wish, and he does work for her willingly.
Throughout Holic, Watanuki is seen going on different jobs and performing various tasks for Yuuko, with occasional help and hindrance from his friends, Kunogi Himawari and Shizuka Doumeki. Himawari is a girl whom Watanuki has a massive crush on who is inherently bad lack, while Doumeki is a boy whom he cannot stand (although he’s not entirely sure why this is) but nonetheless seems to be seeing more and more of as he works for Yuuko. He has a deep connection to the both of them, so much so that he allowed Doumeki to give him half of his eye even though it was his fault that he took the spider’s grdge onto himself, and wishes to stay with Himawari even though he knows she is bad luck.