The English word "Taoism" is used to translate the Chinese terms Daojiao and Daojia . The character Tao (or Dao, depending on the Romanisation scheme one prefers) literally means "path" or "way", but in Chinese religion and philosophy has taken on more abstract meanings. The compound Daojiao refers to Daoism as a religion (i.e., people worshipping at altars); Daojia refers to the activity of scholars in their studies. It must be noted that this distinction is itself controversial and fraught with hermeneutic difficulty.
Much uncertainty exists over the meaning of "Taoism". In some countries and contexts (for example, the national "Taoism" organisations of China and Taiwan), the label has come to be applied to the Chinese folk religion, which would otherwise not have a readily recognisable English name. However many, if not most, of its practitioners would not recognise "Taoism" (in any language) as the name of their religion. Moreover, the several forms of what we might call "elite" or "organised" Taoism often distinguish their ritual activities from those of the folk religion, which some professional "Taoists" (Daoshi) tend to view as debased.
Taoism is not a belief-centered religion, and there are no known Taoist creeds. At the same time, certain characteristic beliefs or assumptions can be identified.
One of these is the existence of several classes of supernatural beings, who may enter into relations with human beings. These include gods, ghosts, and ancestral spirits. Gods are not invariably benevolent, but are generally on the side of righteousness. Ghosts are dangerous spirits of the departed who must be appeased through offerings, especially during the Chinese Ghost Festival. Ancestors are also spirits of the departed, but are distinguished from ghosts in that they boast (male-line) descendents who commemorate them through home rituals.
Another fundamental assumption is the efficacy of ritual in maintaining a positive relationship with these beings. Folk Taoism focuses on rituals of sacrifice; elite Taoism emphasises control over spirits through talismans or "spirit-registers" (fu), on the principle that possession of a spirit's name confers power over that spirit.
Beyond the Chinese folk religion, various rituals, exercises, or substances are said to positively affect one's physical health (even to the point of immortality); align oneself spiritually with cosmic forces; or enable ecstatic spiritual journeys. These concepts seem basic to Taoism in its elite forms.