This article records tradition as it has been passed down and reported. Its sources are not yet part of the atlas's verified catalogue.
In 142 CE, in the mountains of Sichuan in western China, Zhang Daoling reported that the deified sage Laozi had appeared to him and commanded him to found a new religious community. He organized his followers into the Way of the Celestial Masters, known popularly as the Five Pecks of Rice for the annual tribute of grain it asked of every member household.
The community Zhang Daoling founded did not stay a small regional sect. Under his grandson Zhang Lu, three generations later, it grew into something closer to a state than a church: an independent theocratic government centered on Hanzhong, where Taoist priests rather than imperial magistrates administered justice, collected tribute and ran public affairs. That governed territory arose as central Han dynasty authority was already crumbling, and the Celestial Masters' own administration became one part of the wider collapse playing out across China at the same time.
Zhang Lu's theocracy lasted until 215 CE, when he surrendered to the warlord Cao Cao rather than fight a war he could not win. Cao Cao chose to recognize the Celestial Masters school in exchange for that submission, absorbing its organization and its priesthood into the wider Chinese religious landscape instead of trying to destroy a movement that had already built a working government of its own.
What Zhang Daoling's founding changed for Taoism's spread was the creation of the first organized, hereditary Taoist priesthood with real territorial power behind it. A vision reported by one man in the mountains of Sichuan became, within three generations, a religious movement that ruled a province and negotiated its own survival with the strongest warlord in China.