Chinese philosophy has a history of several thousand years. Its origins are often traced back to the Yi Jing (commonly spelled "I Ching"), an ancient compendium of divination, which introduced some of the most fundamental terms of Chinese philosophy. Its age can only be estimated, but it certainly draws from an oracular tradition that goes back to neolithic times.
Early Shang thought was based upon a cyclic notion of time, corresponding to the seasons. This notion, which remained relevant throughout Chinese history, represents a fundamental distinction from western philosophy, in which the dominant view of time is a linear progression. During the Shang, fate could be manipulated by the great deity Shang Di (ch 上帝; pinyin shang4di4), most frequently translated as "Lord on High". Ancestor worship was also present, as was human and animal sacrifice.
When the Shang were overthrown by the Zhou, a new political, religious and philosophical concept was introduced called the "mandate of heaven". This mandate was said to be taken when rulers became unworthy of their position, and provided a shrewd justification for Zhou rule. During this period, archaeological evidence points to an increase in literacy and a partial shift away from the faith placed Shang Di, with ancestor worship becoming commonplace and a more worldly orientation coming to the fore.
In around 500 BC, after the Zhou state weakend and China moved in to the Spring and Autumn Period, the classic period of Chinese philosophy began (it is an interesting fact that this date nearly coincides with the emergence of the first Greek philosophers). This is known as the Hundred Schools of Thought. Of the many schools founded at this time and during the subsequent Warring States Period (the so-called 百家 (bai3 jia1; "100 schools"), the four most influential ones were Confucianism, Daoism (often spelled "Taoism"), Mohism and Legalism. Mohist schools, such as the Logicians, were largely quashed during the short Qin Dynasty, where Legalism was the official philosophy. Legalism remained influential until the emperors of the Han Dynasty adopted Daoism and later Confucianism as official doctrine. These latter two became the determining forces of Chinese thought until the 20th century, with the introduction Buddhist philosophy negotiated largely through perceived similarities with Daoism.
The respective influences of Daoism and Confucianism are often described this way: "Chinese are Confucianist during the day, while they are Daoists at night". Moreover, many Chinese mandarins were government officials in the daily life and poets (or painters) in their spare time.
When the Communist Party took over power, previous schools of thought, excepting notably Legalism, were denounced as backward, but their influence on Chinese thought remains.
Although the individual philosophical schools differ considerably, they nevertheless share a common subset of concepts derived from the Yi Jing: The tai ji (Great Heavenly Axis) forms a unity, from which two antagonistic concepts, yin and yang originate. The word yin originally referred to a hillside facing away from the sun. Philosophically, it stands the gloomy, passive, female concept, whereas yang (the hillside facing the sun) stands for the bright, active, male concept. Both concepts, though antagonistic, are also complementary and the present domination of one implies the future rise of the other, as moon's phases (this is the meaning of the well-known yin-yang figures).