The ending "do" in the word aikido indicates a spiritual path, unlike the ending "jutsu" in the word aikijujutsu, which indicates a system of techniques. Many people see this difference as important as well as regarding iaijutsu and iaido, jujutsu and judo, and kenjutsu and kendo. Others see this distinction as a historically incorrect and somewhat unnatural division. For example, literally, do refers to a path and jitsu to a technique: therefore, some argue, aikido involves both a way (do) and technical study (jutsu).
Ueshiba taught that, while it was important to become proficient in physical technique, this is not the ultimate purpose of training. He taught that the principles learned through training in physical technique are universal and are to be applied to all aspects of one's life. He once commented that he was teaching students not how to move their feet but, rather, how to move their minds.
Many agree that Ueshiba's style became softer, more fluid, and effortless as he grew older. Some suggest this was due to a shift in focus to the spiritual aspects of the art, while others suggest that this was simply a natural result of Ueshiba becoming more proficient in physical technique. Various interpretations have arisen since Ueshiba's death.
A range of aikido schools can be found, each placing a different emphasis on physical techniques, underlying principles, and spiritual concepts. This is largely a result of at what point the founder of each of these schools trained with Ueshiba - earlier or later in Ueshiba's life. The former tend to focus more on physical technique, while the latter tend to focus more on spiritual concepts. However, this should not be overstated, especially since there is considerable variance from sensei to sensei, and an "aikido continuum" is quite problematic to actually construct. Some aikidoka view "physical vs. spiritual" as a false separation, or a failed attempt to stereotype branches of aikido.
Ki Society is an example of a school that focuses heavily on the spiritual concepts of aikido, rather than physical technique.
Ki
The ability to harness one's Ki is an essential part of mastering Aikido techniques. Ki is often translated by aikidoka as 'breath power', 'power', 'energy', or sometimes even as 'soul'. This 'ki' is the same as the 'qi' in qi-gong, but not the same as the 'chi' in t'ai chi. When aikidoka say that someone (usually a high ranking teacher) is training with a lot of ki, they usually want to express that the person in question has developed a high level of harmony in the execution of his technique. Timing, a sense for the correct distance and a centred (undisturbed) mind and body are particularly important. Most teachers claim to locate ki in the hara, which might be loosely defined as the body's centre of gravity, situated in the lower abdomen, about two inches below and behind the navel. In training it is constantly emphasised that one should keep one's hara — that is, remain centred — in order not to lose the ki. Very high ranking teachers sometimes reach a level of coordination that enables them to execute techniques with very little apparent movement, sometimes even without seeming to touch their opponent's body.
Essentially, ki corresponds to the physical concepts of centre of gravity, centre of momentum, and centre of force. However, these centres are not necessarily the same, so Ki also encompasses the biological and mental aspect of training oneself to have exquisite control over motion. Finally, there is a spiritual aspect of how exactly to achieve harmony over these centres.
Of course, the spiritual interpretation of ki depends very much on what school of aikido one studies, as some emphasise it more than others. Aikikai dojos, for example, tend to spend much more time on ki-related training activities than do, for example, Yoshinkan dojos. The importance of ki in Aikido cannot be denied; the name of the martial art, after all, can be loosely translated as "The way of union with ki", or "The way of harmony with the ki". But what ki is is debated by many within the discipline. O-Sensei himself appears to have changed his views over time; for example, Yoshinkan Aikido, which largely follows O-Sensei's teachings from before the war, is considerably more martial in nature, reflecting a younger, more violent and less spiritual O-Sensei. Within this school, ki perhaps could be better thought of as having its original Chinese meaning of breath, and aikido as coordination of movement with breath to maximise power. As O-Sensei evolved and his views changed, his teachings took on a much more spiritual feel, and many of his later students (almost all now high ranking senseis within the Aikikai) teach about ki from a much more spiritual perspective.
Regardless, this quote (from the Aikido FAQ) puts it plainly: "you may not believe in Ki, but you sure as hell cultivate it." Whether you think of ki as breath, spirit, or simply refrain from analyzing it too much, it is clear to any student of Aikido that the martial art makes extensive use of ki. Because of this, and because ki is often associated with spirituality, aikido is considered one of the more spiritual martial arts and has been referred to as "moving zen".
Some believe that the physical entity ki does not exist, but rather is a concept used to teach spirit, intention, and coordination of the physical and psychological through relaxation and control. These aikidoka tend to frown on the overemphasis of the philosophical and spiritual aspects of ki. On the other side of the spectrum, some spiritually oriented aikidoka believe that ki does exist as a physical entity and can be transmitted through space. These tend to make use of concepts like "the ki of the universe", "extending ki", and so on. While the zealous in each group find the existence of interpretations other than their own frustrating, most middle-of-the-road aikidoka consider the disagreement to be a productive one for the greater Aikido community. Some people are turned off by spirituality, but nonetheless appreciate the martial arts beauty; the existence of non-spiritually minded schools allows these types of people to enjoy Aikido and benefit from it. Similarly, some people are not at all attracted by the physical/martial nature of Aikido, and consider its spirituality to be its most important quality; these definitely benefit from dojos emphasising spirituality.
Regardless, aikidoka will no doubt continue their 'quest for ki'. O-sensei famously said that he was just an aikidoka like all of his students, and that he was only beginning to learn.