In 220 CE China's Later Han Dynasty lost the Mandate of Heaven with the death of its last emperor, but by then war and rebellion had already broken the empire apart into warring factions. By 221 only three kingdoms remained, the Wei in the north, the Shu to the west, and the Wu in the east. They never unified China, which stayed in disarray until the Jin dynasty begain in 265.
Cao Cao ruled the Wei kingdom during this period, which was the strongest of the three, independent even during the Han period. He was defeated in 221 in the Battle of the Red Cliff by Sun Quan and Liu Bei, the rival rulers. The Wei and Shu kingdoms were highly centralized and Legalistic, while the Wu was a confederation of families.
During the first century CE, Buddhism entered China from India, where it spread fairly readily, couched in Taoist terminology so much that the early Chinese believed that Lao Tzu had traveled to India, and that the Buddha was his disciple. However, Buddhism didn't take off until the collapse of the Han dynasty when it offered, through its moral teachings, guidance to the people in the chaos of the era. By the end of the Three Kingdoms, it was practiced by peasants all over China.
A different form of Taoism also began, first during the fading years of the Later Han and then quickly during the Three Kingdoms period. The popular form was pantheistic and allowed for the reward and punishment of earthly acts, and had priests and churches. It derived originally from the philosophical discussion of the ancient Taoist texts. But both of these religions, Taoism and Buddhism, were very moralistic in the forms popular during the period, in contrast to their more 'proper' non-theistic, fairly intellectual forms.
The Shu were defeated finally by the Wei in 263, presaging the end of the Three Kingdoms period. The integration of both Chinese and non-Chinese nomads into his army allowed the use of skills unknown to the other two kingdoms. These nomadic groups, under the civilizing influence of the Chinese, eventually formed their own kingdoms in northern China, one of which, the Sima, founded the Jin Dynasty in 265. | 
