So in my story, I have my main villain, who was revived from a 200 year old seal, and is disguised as a rebelling Feudal Lord in order to mask his movements, and avoid detection. Now my problem is should I reveal it to the readers right away and have characters remain ignorant or should I have the readers find out at the same time as the characters? Problem with the latter is that I don't plan on revealing that for a while, and the story feels lacking without a visible ultimate evil (if that makes any sense) But the problem with the former is that when readers/audiences know something the characters don't, the characters seem stupid or blind, and you have readers pretty much screaming at the characters to figure it out. Which one?
The reader has to be interested or he will stop reading. If there is conflict and you have a likable character facing the problem at hand, the reader will want to see him through to the end. You do not need to reveal your villain early in the story, so long as whatever the problem is keeps your character motivated to overcome. If the character will be sitting on his hands until the Big Bad shows up, then you need to reveal the monster as soon as possible.
You know I guess you could categorize this under plot twists. They're no fun if you tell an important secret of the story flat out. It's my opinion that plot twists, or in this case the revealing of your villain, should be hinted at perhaps, just a little if you don't want it to be obvious, so that way when it is revealed, the reader can go back and say 'Hey! I never realized it before but it makes sense!' Of course this can be tricky to execute well too, and may send readers going '...what?' but may be well worth it too.
The essence of suspense is information known to the reader but hidden from the character. A man is siting at a table, drinking a cup of coffee. No suspense. The reader is shown a bomb taped under the table, the timer counting down the seconds remaining. Suspense. The character knows the bomb is there. and how much time is left - the same information the reader has, very little suspense. Neither the reader nor the character knows exactly how much time is left on the timer - some suspense, but mostly exasperation at the stupid character who is just sitting there in the room with a bomb. The reader knows there's a bomb, but is not sure how much time is left. The chararacter has no idea the bomb is there at all. - maximum suspense. The same scene, but it's a flashback, so the reader knows the character survived. - too much reader knowledge, very little suspense. So partial knowledge on the part of the reader, where the characters know even less, is the "formula" for suspense. This is not my idea. It is paraphrased from an interview with the Master of Suspense himself, Sir Alfred Hitchcock.
I think the villain's identity should be a surprise to the reader, BUT that means you'd have to find some kind of way to maintain suspense throughout the story before this is revealed. Just because neither the characters nor the reader is aware of who the bad guy is doesn't mean there won't be tension and suspense. Aren't the good guys busy trying to figure out who the bad guy is, fending off the bad guy stuff he's doing in secret, before they know his identity? Well, there's the suspense and tension and conflict to keep the story interesting before the big reveal. Just because they don't know who he is yet doesn't mean they shouldn't be fighting against him--they SHOULD be fighting against him all the way, just without knowing his identity. In murder mysteries, is everything all calm and boring and okay up until the moment the bad guy reveals himself and then kills somebody? No, the bad guy is busy killing people and doing bad things long BEFORE anybody knows who he is, and the other characters, as well as the reader, are busy trying to figure him out. He's not a very interesting bad guy if he only does bad guy stuff the moment everyone finds out who he is.
The characters are certainly not going to look stupid if you disguise him well. As for revealing it to the audience, it depends on what kind of effect you want. Take crime stories. They can be mysteries, and be about figuring out who the criminal was. Or they can be like Columbo. He always knows who did it at the beginning, and the story is about how Columbo catches him. It all depends on how much you care about surprising the audience.
Should you hide him? Yes. You should reveal just enough information so that he is a credible threat but no more. You will have to do a full character development on him, at least as much as your protagonist. That way you can write about him with conviction but never give your readers more information than what is absolutely necessary. Even in the end, don't give him completely away. Leave your readers and characters wondering about him.
I would hide him away for the most part. Give hints towards his existence and make the threat he poses clear, but don't let them know anything else. Let the reader know that he poses a threat, but don't let them know exactly how. As an example, lets say that you have a guy that is going to try and set off a nuclear weapon. Let them know that the man is capable of great evil through his actions and maybe hint towards him trying to acquire some type of weapon, but don't let them know about the nuclear weapon and his plans for it until it is revealed to the other characters.
