Various budo arts and organizations have different requirements for the usage of the title, but in general it corresponds to 4th or 5th Dan. Some organizations also have the more junior title Fuku Shidoin which corresponds to assistant instructor. It should be noted that the titles are often separate from the dan rankings (not automatic) and are much more specific than the more general sensei.
The titles Fuku Shidoin, Shidoin and Shihan roughly correspond to the titles Renshi, Kyoshi and Hanshi, respectively, used by other martial arts organizations.
The Aikikai adopted this instructor designation system in the 1970s, around the time of the creation of the International Aikido Federation.