Guwange is 2D vertically scrolling shoot'em up played with a character moving on foot. The game takes place during the Muromachi period in Japan with strong fantasy elements. The shikigami demons possess the people and give them great opportunities, but they die after exactly one year. Three heroes want to get rid of the curse. They must kill the evil deity Guwange, but first they must find five elemental scrolls. The game belongs to the "bullet hell" range of shooters, with lots of bullets on the screen where precise movement and pattern detection is required. The player can choose from three characters, each with a different attack style. They can be moved around the screen and need to shoot enemies and bosses. They have access to basic weapons and special shots, but as the characters move on foot, they cannot shoot enemies on rooftops or freely move around the level when there are structures or obstacles in the way. The player can summon shikigami, increasing firepower. The Xbox 360 version has two additional game modes: Arrange Blue Mode (a more challenging version) and Arrange Xbox 360 mode (small changes in gameplay, for example shikigami is controlled separately with the right analog stick).

The story of Guwange is set during the Muromachi period of Japan. During this time, increasing numbers of people suffer possession by shikigami. Although the shikigami grant great spiritual powers, the strain inflicted on the host causes them to die exactly one year after possession. However, a legend has sprung up regarding Guwange, the malevolent god trapped in Mt. Gokumon (i. e. Hell Gate). If one possessed by a shikigami can gather talismans of the five Chinese elements—wood, fire, earth, metal, water—from five demons serving Guwange, then infiltrate Gokumon and slay Guwange, the shikigami will be destroyed and the one possessed will not suffer a premature death.