Taoism is perhaps the most misunderstood of Asia's major religious traditions. The West has been led to believe that Taoism is nothing more than taijiquan, or fengshui, or Laozi's Dao De Jing. To be blunt, we've been fooled. Taoism is much more than mere philosophy, or a way of life, or any single practice. We must not confuse activities commonly beloved by Taoists for those factors that define Taoists.
Taoism is an ancient religious tradition, rooted in traditional Chinese culture, with a large canonical body of ritual, liturgy, prayer, magical practice, meditation and related cultivations, an extensive pantheon of deities, etc. How did we miss all this?
How the West was Fooled
In general, Western missionaries were the first individuals to bring any sense of Taoism back to the West during the mid-to-late 19th Century. At that time, China's ruling Qing Dynasty was much more supportive of Buddhism than it was of Taoism. Taoism of that era suffered from some class-based stereotypes, and was often looked down upon by the upper classes. When the original Western missionary-translators arrived in China, they were guided by this atmosphere to assume that Buddhism was a "lofty" religion, while Taoism was mostly superstition for the "lowly" common man. It is indeed easy to discriminate against that which we do not understand! As these Westerners became acquainted with Chinese religious writings, they found several Taoist books that could be seen as quite compatible with their preconceived (and ill-conceived!) notions regarding Chinese religious practice. The most famous of these books are Laozi's Dao De Jing (The Classic of the Way and Its Power) and the Zhuangzi (named for its author, Zhuangzi). The early translators felt these works could be separated from other parts of the Taoist tradition, and that they represented something again "loftier" than other aspects of Taoism. This reflected their great hubris, and these important works came to be understood outside of all Taoist context.
Once these books (and a very few others) started to be translated, their natural beauty so greatly charmed non-Chinese audiences that an ever-increasing flood of translators have continued to render their own versions. Things have gotten so silly that today we have translators of the Dao De Jing who work only from the translations of others, and who have themselves never read the original version!
Even worse than the problem of poor translation, however, was the impact such translations had upon an unsuspecting Western public. These few works, which represent a miniscule proportion of the 5,000+ works included in the Taoist canon, began to be regarded as the whole of Taoism! We inadvertently mistook an entire forest for one beautiful bough of one ancient tree.