The word dagashi originally referred to cheap candies of low quality, but over time the word came to be used for candies children can easily afford with their small allowances. The variety of dagashi is quite amazing. The types of candies and snacks that can be bought include candy drops, chocolates, cakes, juice powders that you dissolve in water to make juice, rice crackers, flavored squid, and many, many more. They are wrapped in colorful packages, and some come with a sort of lucky draw that allows you to claim a second candy or snack if you get a win.
Until the 1960s or 1970s every Japanese town had a dagashi store, where coin-clutching children from the neighborhood would gather and hang out with their friends. The shops were filled with candies of every color, and they also sold toys - spinning tops, menko playing cards, handicraft sets, marbles, and so forth. Some shops even had games that could be played there or served a kind of savory pancake called okonomiyaki.
The candies and toys were all very cheap, costing from 5 to 10 yen. The kids would compare their budget with what they wanted and think carefully over what to buy or consult with their friends. They would become friends with the woman running the shop (it was more often a woman than a man), who would teach them lots of things.
Over the last few decades, though, traditional dagashi stores have gradually disappeared from the towns. As Japan's economy developed and children came to have more money in their pockets, they began buying more expensive snacks at supermarkets and convenience stores instead of dagashi. And because birthrates have been falling in Japan and there are fewer children, it has become difficult for stores that rely only on children to stay in business.
Nowadays dagashi are more often found in convenience stores and 100-yen shops.