Taoism is indigenous to China. Together with Confucianism, it has exerted great influence on the mind of Chinese people, as well as on the political, economic and cultural life of the country. In many ways the doctrines of Confucianism and Taoism complement each other, running side by side like two powerful streams through later Chinese thought and literature.

As a religion, Taoism was firstly known as the Five Piculs of Rice Sect, founded in the in Shundi (an emperor) period (126 - 144 AD) of East Han Dynasty, and has had a history of more than 1,800 years.

The basic ideas of Taoism are Changsheng (long living), Shen (god), and Xian (immortal), etc., and its doctrine has evolved from the academic thought of Taoists in the Spring and Autumn, and Warring States Period (770-256 BC). In addition, nature-worshiping and ghost-worshiping, popular in ancient Chinese society, also contributed a social and cultural basis to the formation of Taoism.

The Taoists made Laozi their supreme god, taking Dao De Jing as their cannon, with Zhang Ling, the founder, as the Sect's Heavenly Teacher.

During its popularization since its birth, Taoism had long been a kind of high-level culture, and widely pursued by the upper-class society. Consequently, many leaders of Taoism had gained great respects from the imperial governments. However, since the 12th century, Taoism began to decline due to its own reasons, the attitude change of the government as well as the revival of other religions. From then on, Taoism started to spread in the lower-class society, and its witchcraft elements facilitated its influence on the lower-class society.

Since the Ming Dynasty (1368-1644), the influence of Taoism on folks had become stronger and stronger. In the mean time, people held a mussy, superstitious, and vulgar faith in religions because of their illiteracy. During this period, Taoists were of low quality, and knew little about the doctrine and laws of Taoism. They could only carry out some religious rites to satisfy people's demand. Along with the decline of the normal Taoism, some folk religions of even lower level, which were even more ridiculous in both form and content, prospered in the name of Taoism.

As the later Taoists built their doctrines on ancient witchcraft and recipes for immortality, absorbing all sort of popular superstitions and demon lore, the Taoist school became more and more a cult of popular religion and finally, an object of ridicule among the educated people.