Here are bits that we do know:
Gichin Funakoshi, born and raised in Okinawa, is the man who opened the first official, public karate dojo, and he did so on the main island of Japan. Prior to that, it was mostly studied at night, in secret. This was due to Japanese occupation - making the carrying of weapons illegal. Like all resourceful people do, they started to hide their weapons within what they had with them (Similar to the birth of Capoeira). Farm implements make wonderful weapons. So do oars.
Now, karate? Here's a few fun facts.
- Karate today is made of two characters which mean open/empty hand
- Karate, until Funakoshi made it public and official, was made of two characters which meant Chinese hand*
- The Okinawan had a fighting style of their own which was called Nahate.
- Oh, and one called Shurite
- Oh, and one called Tomarite
Feel free to check out Okinawan Martial Arts, the Wiki article. Okinawa had the advantage of having easy trade with both Japan and China, so it was also the main place for cultural exchanges to happen, rather like a filter of sorts. I hope this helps you a bit in your search.
* Note: Dave Liepmann in a comment mentions Funakoshi may not in fact be the originator of the "Open Hand" characters: Chomo Hanashiro's "Karate Kumite," first published in August 1905" according to a former instructor of mine.