Two great streams of human thought have influenced Chinese religion: Taoism, and Buddhism. The founders of Taoism and Buddhism have been deified. There are still some Chinese people to have Islam, Christianity and Judaism as their beliefs.
It is said that Taoism is the only true homegrown Chinese religion. Buddhism was imported from India and Confucianism is mainly a philosophy. According to tradition, the founder of Taoism was a man known as Laotzu, whose name has been variously misspelled in western literature as ‘Lostse’ and ‘Laotze’. He is said to have been born around the year 604 BC. Laotzu translates as the ‘Old One’ or the ‘Grand Old Master’. It's widely believed that Laotzu was the keeper of the government archives in the west of China, and that Confucius consulted with him.
At the end of his life, Laotzu is said to have climbed on a water buffalo and ridden west towards what is now Tibet, in search of solitude for his last few years. On the way, he was asked to leave behind a record of his beliefs. The product was a slim volume of only 5000 characters, the Tao Te Ching (Dao De Jing) or The Way and Its Power. He then rode off on his buffalo.
It's doubtful that Laotzu ever intended his philosophy to become a religion. Chuangtzu (Zhuangzi) who lived between 399 and 295 BC, picked up where Laotzu left off. Chuangtzu is regarded as the greatest of all Taoist writers and The Book of Chuangtzu is still required reading for anyone trying to make sense of Taoism. However, like Laotzu, Chuangtzu was a philosopher and was not actually trying to establish a religion.
Credit for turning Taoism into a religion is generally given to Zhang Daoling, who formally established his Celestial Masters movement in 143 BC.
At the center of Taoism is the concept of Dao. Dao cannot be perceived because it exceeds senses, thoughts and imagination; it can be known only through mystical insight, which can not be expressed with words. Dao is the way of the universe, the driving power in nature, the order behind all life, and the spirit that cannot be exhausted. Dao is the way people should order their lives to keep in harmony with the natural order of the universe.
Just as there have been different interpretations of the ‘way’, there have also been different interpretations of De一the power of the universe. This has led to the development of three distinct forms of Taoism in China.
Taoism later split into two divisions, the ‘Cult of the Immortals’ and ‘The Way of the Heavenly Teacher’. The Cult of the Immortals offered immortality through meditation, exercise ,alchemy and various other techniques. The Way of the Heavenly Teacher had many gods, ceremonies, saints, and special diets to prolong life and offerings to the ghosts. As time passed, Taoism increasingly became wrapped up in the supernatural, self-mutilation, witchcraft, exorcism, fortune-telling, magic arid ritualism.