Where they proceed to fight, sometimes to the death.yea that's the reason why we're at peace enough to send multiple of the villages genin to a foreign village *sips tea suspiciously*
The Chunin exams are a war game more than anything. It's an excuse for them to have a miniature war in an enclosed environment with little loss of actual war potential, in terms of Jonin, where they can guesstimate the strength of their opponents. It's supposed to foster good relations between villages, but forcing your children to fight in gladiator matches for the amusement of the crowd...well, not sure what sort of good intentions you'd be fostering there.