The Chinese character (pinyin D� Wade-Giles Tao4) "Way". The English word Taoism is used to translate the Chinese terms Daojiao "teachings/religion of the Dao") and Daojia ("school of the Dao"). The character Tao (or Dao, depending on the romanisation scheme) means "path" or "way", but in Chinese religion and philosophy it has taken on more abstract meanings. The compound Daojiao refers to Daoism as a religion; 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. Many scholars believe that there is no distinction between Daojia and Daojiao, and that the distinction is propagated by people who are not familiar with Taoism.

Much uncertainty exists over the meaning of Taoism, not least because of its often being confused with such seemingly similar disciplines such as Zen. This is compounded by the fact that one of the most important scholarly works on Taoism in any western language, 'Taoism and Chinese Religion' by Henri Maspero, is no longer available in English even though a highly regarded translation was published by the University Of Massachusetts Press in 1981. In some countries and contexts (for example, the Taoism organisations of China and Taiwan), the label is applied to 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 organised Taoism often distinguish their ritual activities from those of the folk religion, which some professional Taoists (Daoshi) tend to view as debased.

Chinese alchemy, astrology, cuisine, several Chinese martial arts, Chinese traditional medicine, fengshui, and many styles of qigong breath training disciplines have some relationship with Taoism.