Here's an extract of Kishimoto's interview
Konohagakure no Sato Guns and vehicles shouldn't be drawn.
A: Well, well, we reach the final keyword. The main stage of "Naruto", "Konohagakure no Sato". To you, what image do you have of this
place? For example, was it modeled on the scenery around your parents'
home in Okayama?
Masashi Kishimoto: That's right. To be honest, I didn't think much about this, and got
a lot on my inspiration there. Maybe it was subconsciously modeled on
Okayama's scenery.
A: What kind of time period did you set it in? If it was in the distant past, then covenience stores wouldn't be there...
Masashi Kishimoto: It's not really any different to present-time. Though possibly a
little in the past, maybe?
A: What kind of place is it? Is it Japan? If so, what prefecture...?
Masashi Kishimoto: It's a completely original place. I didn't set it anywhere. A place
inside my own head... If anything, the climate and topography resemble
that around Kyoto. As I've never been to Kyoto, it's my own image of
it. (laugh)
A: What material did you use for it?
Masashi Kishimoto: I like Japanese culture, and since I studied it, I used a lot of
material from that. Crests and folding fans... I often look at
Japanese-style gardens and watch Kabuki.
A: Do you have any rules about what is definitely not allowed to be drawn in the "Naruto" world?
Masashi Kishimoto: Firstly, projectile weapons such as guns aren't allowed. (The one
exception is Inari's bowgun.) Guns aren't suited to ninja. Gunpowder
is used in the anime, though I don't think it should be there. And,
vehicles such as aeroplanes are not allowed. I try to restrain
technology that can be used for war... For example, if missiles were
in it, it'd be the end. (laughs)
A: Well, thank you very much for everything today.
Masashi Kishimoto: Thank you very much!
And from Shonen Jump
Shonen Jump:Your work seems to have a science fiction influence.
Approximately speaking what is the technology level in the world of
Naruto?
Masashi Kishimoto: Actually, the world of Naruto doesn’t differ very
much from our present time. TV, refrigerators and air conditioners
exist in the world. The only exceptions are weapons and explosives,
which I’ve decided to set in a much earlier era. That’s why you don’t
see firearms.