Diversity in the Daoist Tradition
The Four Areas of Daoist Practice
Taoism became a complex, pluralistic system in the forty centuries since its legendary beginnings. It is concerned with four major areas: the philosophical (Lao Tzu and Chuang Tzu, for example), the ritualistic (temple worship of countless gods and goddesses), the talismanic (sorcery and magic to ward off evil), and the ascetic (the tradition of gaining immortality or spiritual enlightenment through elixirs or meditation). This is simply a rough division; most Taoist sects combine the four in varying proportions. Almost all orders, for example, maintained public temples that both served their constituencies and brought financial support for more esoteric practices. (The Wandering Taoist, xix-xxx)

I. Philosophical Daoism
Actually, our interest in trying to separate philosophy and religion in Daoism is more revealing of the Western frame of reference we use than of Daoism itself. Daoist ideas fermented among master teachers who had a holistic view of life. These daoshi (Daoist masters) did not compartmentalize practices by which they sought to influence the forces of reality, increase their longevity, have interaction with realities not apparent to our normal way of seeing things, and order life morally and by rulership. They offered insights we might call philosophical aphorisms. But they also practid [sic] meditative stillness and emptiness to gain knowledge, engaged in physical exercises to increase the flow of inner energy (qi), studied nature for diet and remedy to foster longevity, practiced rituals related to their view that reality had many layers and forms with whom/which humans could interact, wrote talismans and practiced divination, engaged in spellbinding of “ghosts,” led small communities, and advised rulers on all these subjects. The masters transmitted their teachings, some of them only to disciples and adepts, but gradually these teachings became more widely available as is evidenced in the very creation of the Daodejing and Zhuangzi themselves.
       The anti-supernaturalist and anti-dualist agendas that provoked Westerners to separate philosophy and religion, dating at least to the classical Greek period of philosophy was not part of the preoccupation of Daoists. Accordingly, the question of whether Daoism is a philosophy or a religion is not one we can ask without imposing a set of understandings, presuppositions, and qualifications that do not apply to Daoism. But the hybrid nature of Daoism is not a reason to discount the importance of Daoist thought. Quite to the contrary, it may be one of the most significant ideas classical Daoism can contribute to the study of philosophy in the present age. (Ronnie Littlejohn, Internet Encyclopedia of Philosophy)
II. Ritualistic Daoism
The Pantheon: The supreme Daoist deities are the Three Clarities (Sanqing), each of which rules over one heaven (for their names, see 3.4). They are associated with different pre-cosmic eras and are deemed to be at the origins of the textual corpora associated with the Three Caverns. Along the history of Daoism, the Three Clarities have been supplemented, but never replaced, by other deities that effectively might share with them the title of “highest Daoist deities”. Most important among them are Taiyi, or Great One, who represents the fundamental Unity of the cosmos in a deified form; and Yuhuang, or Jade Sovereign, the highest god of popular religion before his incorporation in the Daoist pantheon in the Song period.
Several other gods, such as the “emperors” (or “thearchs”, di) of the five directions, represent cosmological principles. In addition, a multitude of deities, most of which originate from local cults and are shared with the common religion, contribute to form a pantheon that is impossible to describe in full, as it takes different forms in different places and times. To give a few examples, these deities include the Queen Mother of the West (Xiwang Mu, an ancient goddess of the immortals); the Mother of the Dipper (a deity of Indian origin, especially associated with children and childbirth); Mazu (a woman who lived in the late 10th century and was deified as the protector of sailors and fishermen, but also of women seeking children);  Zhenwu (the protector of the Ming dynasty, related to the Northern Dipper and provided with exorcist and healing powers); Marshall Wen (Wen Yuanshuai, who gave up his life to prevent “plague spirits” from poisoning local wells); and the “plague spirits” themselves, who are appeased in Daoist rituals called Plague Offerings (wenjiao). (Fabrizio Pregadio, Stanford Encyclopedia of Philosophy — note: citations have been removed, but can be obtained from the SEP version)

Rituals: The two main Daoist ceremonies in the present day are the Offerings (jiao) and the Merit (gongde) rituals. The Offering is performed to renovate the bond between a community—from the village to the empire—and its gods. The Merit ritual is a funerary ceremony performed to ensure that the deceased is not kept in the netherworld but may ascend to Heaven.
The communal ritual is requested and organized by the representatives of community via the local “lay association”, which is also in charge of the local temple or shrine. The main officiant is the Daoist priest, or daoshi (lit. “Daoist master”), a function typically transmitted within families. When he receives a request to celebrate an Offering, the daoshi convenes his assistants to perform the ritual. The celebration typically lasts one, two, three, five, or ten days, but arrangements (especially the preparation of the necessary paperwork) require a much longer time. While the Offering is celebrated in the temple, a festival is performed in the streets outside, with processions—the statue of the local tutelary god is carried through the neighborhood—music, and theatrical performances. In addition to this dual “outer” and “inner” aspect of the celebration, another important distinction is the one between the portions of the ritual that are public and those that are performed behind closed doors, in which only selected representatives of the local community can participate. (Fabrizio Pregadio, Stanford Encyclopedia of Philosophy — note: citations have been removed, but can be obtained from the SEP version)
III. Talismanic Daoism
The Chinese Taoist Talismans Called “FU” in China are probably the most powerful enchantment tools. Each talismans power are different, and so is the way to activate and use that power. Fu’s and incantations can be used to manifest psychic or spiritual energy. It is the intent’s behind that Fu’s that determines whether its white or black magic. For illustrations, can be used to invoke gods, deities, protect a household, improve your business, attract wealth, enhance relationship, cursed or hex an enemy, dispelled sorcery, activating good “Chi”, dissolve a bone lodged on throat, arrest bleedings, prevent burglary, prenatal protection, etc... The talismans are usually drawn for various purposes. Each practitioners from different lineages of Taoist schools has their own way of drawing talismans, activating talismans, rituals to perform, and their form of talismans which is usually handed down from their past lineage of teachers. These may comprises of various Mantras, Mudras (hand gestures), rituals, and invocation to empower and bless these talismans.
Most of these talismans are guarded secret which are never revealed to the uninitiated. As they are so sacred. And some of these Talismans and rituals are so deadly that it can caused harm, injury, insanity and even death when use upon their enemies. These practitioners from the “Tao of the Left” or practice “side doors” are well versed using talismans to control ghosts and spirits to do their biddings. With talismans they can use to bind the ghosts and spirits, some of them keeps numerous numbers of these entity to help them . Taoist Talismans are extensively use during the Pre Han dynasty for illness such as fever, headache, for stopping bleedings, gynecological problems, toothache, mental illness (believed caused by spirits) and etc... Until today Taoist talismans plays an important role to the Taoist communities, talismans are highly revered as a protection, when carried. Drunk to heal illness, and carried to enhance relationship between spouses! (taoistsecret.com)

Feng Shui
As far as religion is concerned, the most influential pseudoscience was that of “winds and water,” the literal translation of feng-shui. ... Feng-shui constitutes a system of divination for determining the auspicious citing of human dwellings — for the living or for the dead. ... [The] fundamental thing is to place the grave or  home properly with regard to the functioning of yin and yang ... [for] in the Chinese view the earth is no different from the heavens in pulsating with the breaths of the two primal forces. (Chinese Religion: An Introduction, 19-20)

IV. Ascetic Daoism
Waidan, translated as external alchemy or external elixir, is the early branch of Chinese alchemy that focuses upon compounding elixirs of immortality by heating minerals, metals, and other natural substances in a luted crucible. The later branch of esoteric neidan “inner alchemy”, which borrowed doctrines and vocabulary from exoteric waidan, is based on allegorically producing elixirs within the practitioner’s body, through Daoist meditation, diet, and physiological practices. The practice of waidan external alchemy originated in the early Han dynasty (206 BCE–220 CE), grew in popularity until the Tang (618–907) when neidan began and several emperors died from alchemical elixir poisoning, and gradually declined until the Ming dynasty (1368-1644). (Wikipedia/Waidan)
Neidan, or internal alchemy (simplified Chinese: 內丹术; traditional Chinese: 內丹術; pinyin: nidān sh), is an array of esoteric doctrines and physical, mental, and spiritual practices that Taoist initiates use to prolong life and create an immortal spiritual body that would survive after death (Skar and Pregadio 2000, 464). Also known as Jindan (金丹 “golden elixir”), inner alchemy combines theories derived from external alchemy (waidan 外丹), correlative cosmology (including the Five Phases), the emblems of the Yijing, and medical theory, with techniques of Daoist meditation, daoyin gymnastics, and sexual hygiene (Baldrian-Hussein 2008, 762). In Neidan the human body becomes a cauldron (or “ding”) in which the Three Treasures of Jing (“Essence”), Qi (“Breath”) and Shen (“Spirit”) are cultivated for the purpose of improving physical, emotional and mental health, and ultimately returning to the primordial unity of the Tao, i.e., becoming an Immortal. It is believed the Xiuzhen Tu is such a cultivation map. In China, it is an important form of practice for most schools of Taoism. (Wikipedia/Neidan)
Early morning in most Chinese cities a curious ritual takes place. In parkways, on sidewalks, in private courtyards and public squares, people congregate in groups as small as two and as large as two hundred or more. They stand and swing their arms in circles, drawing the morning air inside themselves with sweeping gestures. Here, a group follows a leader through a cycle of movements that repeat again and again. There, on the next corner, a smaller group practices seemingly randomly. Yet there seems to be an internal coherence. Sometimes there is music. Often they practice in silence. ... In recent years, qi gong has been gaining an enormous popularity in China, as it has around the world. Practitioners consider it the dao of preserving life, a treasure from ancient times. Contemporary masters claim followings that number in the hundreds of thousands, if not millions. Not only are the followers of such masters legion, so are the myths and legends that have grown up around individuals supposed to possess “special skills.” In numerous schools of qi gong around China, something from the country’s ancient cultural past is alive and flourishing. It is as if the magic of the ancient shaman reemerged in the midst of China’s headlong rush to the twenty-first century. (A Brief History of Qi117-8)

Qi gong is a generic term that is used to describe a considerable variety of schools of thought and approaches to the practice of developing the qi. ... The origins of qi gong are not precisely known. ... It is conceivable that among the Chinese there have been practitioners of some form or other of qi gong since the dawn of civilization. The oldest coherent system of exercises designed to guide and cultivate qi, however, date to before the beginning of the imperial era of Chinese history. ... [In the Ke Yi chapter of the Zhuangzi, ] there are clear references to this early systematic method of developing the power of qi and harnessing its life extending potentials. “One who practices dao yin [exercise to lead and guide the qi] to preserve one’s health seeks to be like Peng Zu who excelled at longevity.” (A Brief History of Qi, 118-9)
“The special quality of tai ji quan,” according to the great twentieth century tai ji master Cheng Man Ching, “is its ability to sink the ch’i  to the tan t’ien.” For the past several decades, the art of tai ji quan, or “yin yang boxing” as it is sometimes called, has been rapidly and steadily growing in popularity outside of China. ... The system of postures and movements which was highly developed by the Chen clan in Hebei Province during the eighteenth and nineteenth centuries incorporated the fundamental principles of Daoist philosophy into a regimen of exercise, meditation, qi gong, and martial techniques. The entire system depends upon a comprehension of yin and yang, for the name, tai ji quan, literally means “tai ji boxing.” Tai ji is the term used to describe the interrelationship of yinyang. (A Brief History of Qi, 154-5)
Recall that the dan tian is a special point in the body, located approximately one and one-third inches below the navel in the interior of the body somewhat less than half-way behind the front of the lower abdomen. Its name reveals an important aspect of its significance. The word dan comes from Daoist alchemy. It is a name associated with the long-sought-after internal elixir [See Chapter 5]. The Daoists believed that an elixir of sorts could be fashioned without the use of herbs or chemicals through the concentration of qi and jing (essence) within the body. ... Tai ji quan, springing from Daoist sources, incorporates the dan tian as the focal point of the entire exercise. ... Indeed, tai ji teachers who agree on little else can generally be found to be in accord on this one fundamental principle of the art: only by concentrating the qi, the functional power of the body, in the dan tian can the student make real progress. (A Brief History of Qi, 157-8)