Taoism is a 5,000 year old tradition. It is not really a religion but more a way of life. It is based on living in harmony with the natural world and uncovering the connection we have with all things. True Taoism or Inner Taoism (tao jia) is focused on the internal spiritual unfolding of the individual as he/she comes to an understanding of the forces of balance (yin/yang) and energy (chi or ki) that govern all of creation.
At the core of Taoism is the Tao. The Tao is all encompassing. It is the energy of everything in existence. Despite the appearance of differences in the world, within the Tao everything is one. Since all is one, matters of true and false or good and evil are irrelevant and only arise when people cannot see beyond their narrow perception of reality. Taoism is a system of philosophical thought that puts emphasis on a deeper exploration of life instead of the shallow materialistic world.
Taoism is a holistic tradition that addresses all three parts - body, mind, spirit - of the whole individual. The physical practice of Taoism is concerned with breathing and movement exercises to circulate energy and maintain health. The mental practice of Taoism is meditative in nature and focuses on introspection into the nature of existence. The spiritual practice of Taoism seeks to understand and reveal the grand interconnection of the universe and merge with it through esoteric and mystical experiences.
The Taoist masters of old recognized that most people are only recreationally spiritual, meaning that they are not really interested in anything beyond surface spirituality. Life is too hectic and busy to spend time in contemplation of the Tao. They developed simple exercises of energy circulation to enable people to live healthy, peaceful and successful lives. The idea was that if people practiced these arts for their own gain long enough, they would eventually stumble upon a deeper realization of the Tao and their connection to it.