The Taoist religion emerged in China only after a long process of religious change lasting from the end of the Shang dynasty (1700-1027 B.C.E.) until more than a hundred years into the Common Era. The religion of the Shang had been centered on a relationship between an earthly ruler and his ancestors, and particularly his counterpart in the divine bureaucracy, the celestial emperor Shangdi. This relationship was maintained through divination and blood sacrifice. It lost its hold when that dynasty was overthrown, and the subsequent Zhou dynasty equivalent was never as dominating.
The latter half of the Zhou dynasty, known as the Eastern Zhou (770-221 B.C.E.), brought economic and social changes as well. The region became more urban; agriculture expanded and forests were destroyed to create more fields for cultivation; the population increased markedly as well. Merchant and artisan classes began to rival the old feudal aristocracies. Literacy increased among the upper classes, as did the number of people who received some type of education, and by the end of the Zhou a sizeable body of literature had developed.
Religion and politics continued to be intertwined, as they had been in the Shang. The Shang had believed that the ruler's position was ordained by a divine bureaucracy of ancestors, headed by one supreme ancestor. As the counterpart of that divine ruler, the earthly ruler's supreme charismatic potency, or de, enabled him to control the affairs of state, assisted by male relatives.
As the social and political situation changed, and family relationships ceased to be the only means of determining who leaders would be, advanced schooling developed as a means of preparing the sons of the upper classes for positions in government. This type of education was both intellectual and moral. The term "Tao" in Chinese means, among other things, "way" or "path," and refers to a way to live and behave, and, particularly in this period, it also refers to a way to rule over or lead others.
During the latter centuries of the Eastern Zhou there was an intensive cultural debate about "the way" or Tao. This debate was sometimes called baijia zhengming, or "the hundred schools contend," because so many different schools of thought engaged in it. The most prominent discourses of the "hundred schools" had a profound impact on subsequent Chinese political, social, and religious thought. Among these discourses were the teachings of Confucius (Kongzi) (551-479 B.C.E.), Mozi (c. 480-390 B.C.E.), Mencius (Mengzi) (4th century B.C.E.), Zhuang Zhou or Zhuangzi (4th century B.C.E.), Xunzi (3rd century B.C.E.), and Han Feizi (c. 280-233 B.C.E.). Some of these teachers recorded their own ideas in writing, while others' teachings were recorded posthumously by students.
Sometime around the 3rd or 4th centuries B.C.E., some writings of unknown origin were collected to form what is now known as the Taode jing (Tao Te Ching), a book about Tao (the way) and de (virtue, or charisma). The Taode jing is a compilation of several hundred years of writing, and also includes some aphorisms that may have been much older.
Around the late 3rd century B.C.E., some began to attribute the authorship of the Taode jing to an individual called Laozi. Unlike the other participants in the "hundred schools" debates, there is no evidence that Laozi was a historical figure. The name Laozi means, literally Old Child, or Old Teacher. Some scholars surmise that the association of the name Laozi with the text was intended to indicate that it was an expression of ancient ideas or ancient wisdom. Soon Laozi's historicity was accepted, and his biography was included in Sima Qian's famous 1st century B.C.E. collection of historical records.
The Taode jing has a different form than most of the writings of the "hundred schools," which are typically composed of passages, short or long, that open with a phrase such as "Confucius said" or "Mozi said." The contents may be short didactic sayings, or they may be stories about conversations between a teacher and his students or between the teacher and an opponent who represents a different opinion. In contrast, the Taode jing takes the form of poetry, and mentions no names. It is composed of 81 chapters, each no more than a page in length; some verses are only six to eight lines long.
Another individual who wrote about the way, or Tao, was Zhuang Zhou (4th century B.C.E.), also known as Zhuangzi (Chuang Tzu). Zhuang Zhou was an historical figure, but little is known about him, and while he may have written parts of the book that bears his name, other sections are obviously later additions. The book in its current form was not compiled until 300 C.E.