Taoism began in the period of Chinese history called the Warring States period, a time from about 1122 - 256 B.C.E. when the mighty Chou dynasty had deteriorated into a loosely bound system of feudal states engaged in continuous warfare. A time which proved to be a great burden upon the common people.
The authority of the traditional ruling class was weakened by the constant turmoil and suffering and the people were getting tired of the whims of the aristocracy. Long suppressed ideas and aspirations burst forth like a "hundred flowers." Ideas on law, social order, government, music, agriculture, literature, conduct and ethics became known as the "hundred schools."
Two of these schools of thought endured and influenced life in China for over 2,000 years. Taoism and Confucianism.
The Tao, which means the way, road, or path, but can also mean the principle, method, or doctrine, was a sort of harmony or orderliness in the universe - a sort of will of heaven itself over any divine will other than the universe itself. A providence rather than a Creator serves as a divine will or legislation.
The belief that there is a natural and correct way to do anything and everything and that everyone has a proper place and function. For example, if a ruler performed his duty and dealt justly with the people - looking after the sacrificial rituals pertaining to heaven, then peace and prosperity would prevail over the nation. If the people also played their part of the Tao and followed it there would be harmonious peace. But if they resisted it there would be chaos and disaster.
Chinese philosophical and religious thinking was greatly influenced by the Tao, and Taoism and Confucianism seemed to actually be two different expressions of the same concept. Tao was mystical and advocated inaction, quietness and passivity. It was a shunning of society and a return to nature. Everything will come out right if people sit back, do nothing and let nature take its course.
Confucianism, on the other hand, was more pragmatic, teaching that social order would be maintained when the people set about their intended role and duty. Ruler-subject; father-son; husband-wife; etc. It provided guidelines for these positions.
Lao-tzu, meaning "Old Master" or "Old One" was the founder of Taoism. He was said to have lived in the sixth century B.C.E. though that is uncertain. The reason for the title Lao-tzu is mythical more than anything. He is said to have been carried by his mother so long before he was born that his hair had already turned white by the time of his birth.
Records of Li Erh, which was probably the real name of the founder of Taoism known later as Lao-tzu, can be found in the Shih Chi, or historical records by Ssu-ma Chien, a respected court historian of the second and first centuries B.C.E.. Li Erh was a clerk in the imperial archives at Loyang, central China. It says:
"Lao Tzu resided in Chou most of his life. When he foresaw the decay of Chou, he departed and came to the frontier. The custom-house officer Yin Hsi said: 'Sir, since it pleases you to retire, I request you for my sake to write a book.' Thereupon Lao Tzu wrote a book of two parts consisting of five thousand and odd words, in which he discussed the concepts of the Way [Tao] and the Power [Te]. Then he departed. No one knows where he died."
Most scholars doubt the authenticity of the account, but the book known as Tao Te Ching ("The Classic of the Way and the Power") is considered the primary text of Taoism. If you actually compare various translations, even just those online, you see that the change of some characters and their meanings have caused a great deal of confusion regarding the various interpretations. It is almost as if the meaning of the text is completely up for grabs with no possible way to fairly guess the original meaning.
Taoism's second sage was Chuang Chou, or Chuang-Tzu. Master Chuang. (369-286 B.C.E). He elaborated upon the Tao as well as introduced the yin and yang of the I Ching to Taoism. The common people remember him best by this, from a dream: "Once Chuang Chou dreamt he was a butterfly, a butterfly flitting and fluttering about, happy with himself and doing as he pleased. He didn't know he was Chuang Chou. Suddenly he woke up and there he was, solid and unmistakable Chuang Chou. But he didn't know if he was Chuang Chou who had dreamt he was a butterfly, or a butterfly dreaming he was Chuang Chou."
Lao-tzu didn't make an issue of agelessness and resilience, but some of the texts of the Tao Te Ching may have suggested this theme which was later expanded upon by Chuang-Tzu and much later still by later Taoist religionists. It began to evolve into a possible means of tapping into the secrets of nature and heaven and becoming immune to physical harm, diseases and death.
Taoist started experimenting with meditation, breathing exercises, and dieting. Methods thought to delay aging and death. Legends of immortals who could fly on clouds and disappear at will and who lived on sacred mountains or remote islands began to circulate. Chinese history tells of the Chin emperor, Shih Huang-Ti, who sent a fleet of ships with 3,000 boys and girls to find the legendary island of P'eng-lai, the abode of the immortals, in order to bring back the herb of immortality. They didn't find it but it is thought that they populated the islands later known as Japan.
It was during the Han dynasty (206 B.C.E. - 220 C.E.) that Taoism began to practice magic in full force. Emperor Wu Ti, though promoting Confucianism as the official State teaching, had been attracted to the Taoist idea of immortality. Such as the 'immortality pills' developed by the Alchemist Taoist - by fusing lead (dark, or yin) and mercury (bright, or yang) they thought they were imitating the process of nature. Mercury and Lead. Not surprisingly it wasn't particularly effective for gaining immortality. They also developed magic talismans that could supposedly render one invisible and invulnerable, to walk on water or fly through space. Then the magic spells of yin-yang on buildings and doorways to repel evil spirits and wild beasts.
By the second century C.E. Chang Ling or Chang Tao-ling established a Taoist secret society in western China, practicing magical cures and alchemy. Taoism had already transmogrified from a philosophy to an organized religion. In this society each member was levied a fee of five pecks of rice, and so became known as wu-tou-mi tao (Five Pecks of Rice Taoism).
Chang Ling claimed to have received a personal revelation from Lao-tzu. He was the first "Celestial Master."
Chang wouldn't be around for long, as legend would have it, because he succeeded in making the elixir of life and ascended alive to heaven, riding upon a tiger from Mount Lung-hu (Dragon-Tiger Mountain) in Kiangsi Province. An order of "Celestial Masters" reincarnated from Chang began.
During the Tang dynasty (618 - 907 C.E.) Buddhism started to challenge Taoism in Chinese religious life. To counter this Taoism started to dig deep into the roots of Chinese folklore and religious tradition. Lao-tzu was deified, Taoist texts were canonized, Temples, monasteries and nunneries were erected; much in the Buddhist fashion. Taoism adapted a pantheon of gods, goddesses, and fairies - from folklore the Eight Immortals (Pa Hsien), god of the hearth (Tsao Shen), City gods (Cheng Huang) and guardians of the door (Men Shen).
Taoism became an amalgam of elements of Buddhism, Superstition, Spiritism, Ancestor Worship and even Christianity. Priests for hire from your favorite branch of gods and goddesses to protect against evil at funerals, homes and businesses. They celebrate festivals and perform rituals.