The Sharingan is the Uchiha clan's special ability. The person is able to call upon his special eye technique at anytime. It turns the person's regular pupil color into a red pupil. A beginner will only have 1 to 2 fire rings around the pupil which they are able to copy ninjutsu, taijutsu and others (handwriting). Those that have fully master the Sharingan will have 3 fire rings which they are able to copy ninjutsu, taijutsu, and other jutsu. Some said that the Sharingan evolved from the Byakugan (whatever that means). The Sharingan is superior than the Byakugan when it comes to combat. It's an ability that beat the opponent physically and mentally.
The Sharingan require no hand seals or chakra to activate it. Sharingan is known for its ability to copy jutsu and predict the future (?). It is able to copy only ninjutsu and taijutsu. There's 2 way to copy jutsu, the person can either focus or not focus at the jutsu being perform. It is not automatic since it has to see the jutsu to copy it (similar to seeing the word "Sharingan" for 1 second but you are able to recall it, refer to as "Sensory Store"). Another ability of the Sharingan is the ability to see the future, not literally. It cannot see what will happen 20 years from now but it is able to fully predict what their opponent is thinking before he actually does it. It is one way to copy hand seals and perform them at the same time as the opponent (eg. Zabuza vs Kakashi). It is able to use this ability to mentally disturb their opponent, making them believe that they can truly see the future.
Beyond the Sharingan is the Mangekyou Sharingan (Kaleidoscope). The 3 fire rings now merge with the red pupil forming a 3 edged star. To obtain it, one must kill their best friend (why?). It was first reveal when Itachi killed Shisui, who Itachi considered as a brother, near Nakano River. It's another form of genjutsu but far more powerful and mind boggling than regular genjutsu. It's the ability to cause mental destruction to your opponent by putting them in a virtual world where 1 day is just a couple second in the real world. Thought it is only an illusion, it does not cause physical pain but rather mental anguish.