Hi Nano,
Yep, there are a lot of Japanese terms, but hey its just a game and of course its not perfect. For instance, Master Wu speaks with some Japanese words and wears a Kimono and such, but the name "Wu" is Chinese.
Also, the "Shitagi", they show a Chinese Gung Fu (or Frog Shirt) Shirt with a Japanese name.
I noticed a lot of little things like this in the game, but it didn't bother me as I was too busy swashbuckling and chasing crazy Toads and the like.
I also think that the term clan can be interpreted in many ways, for there are even today many "clans" of martial artists and other things in kind.
Personally, I think the Zenmaster in this game is the coolest character role I have seen in any RPG to date. Whoever thought the idea up gets a big thumbs up in my book. The only draw back is having to go through 98% of the game before you can become one.
Also, Zen is not simply a form of meditation, it is a way of thinking, and more importantly, a way of living.
Best,
Scronan