Tai Ji

Taiji (太極) is a state of being from Tao and Wuji. It is a state of absolute, and of infinite potentiality. In Tao Te Ching, Tao manifested as One, which is Taiji. In a Taoist guidance book, the same verse was amplified as out of Tao came Taiji, which then split into yin and yang or Two Aspects, yin and yang slitting into the Four Realms, Wu xing the Five Elements, and from there the world was created.

Taiji was a state in which the world became intelligible before creation. Taiji may be equated to the One, Oneness, Unity, as in attaining One or Unity (得一) and as stated in the Tao Te Ching.

Core concept
Translated as "the great ultimate," the Taiji is understood to be the ideal of existence. Yin and yang represent the contrasting qualities within reality and experience. For example, light contrasts with darkness, providing them both with context and therefore meaning. Taiji is not perceived as a simple list of all things and potential things, but rather a complex interconnection of all things in all possible contexts. This concept is often used to illustrate the doctrine of cosmological unity. It is also used to explain the creation of the "myriad things" (i.e., everything in existence) through the dialectical process of alternating polarity between yin and yang. Western proponents of Taoism sometimes conflate Taiji and the "myriad things," but Taiji is not only representative of what exists, but also that which has existed, will exist, and could potentially exist.

Taiji in historical China
The concept of Taiji was introduced in the Zhuang Zi, showing its early place in Taoism. It also appears in the Xì Cí (Great Appendix) of the I Ching, a fundamental Taoist classic.

When Confucianism came to the fore again during the Song Dynasty as Neo-Confucianism, it synthesized aspects of Chinese Buddhism and Taoism, and drew them together using threads that traced back to the metaphysical discussions in the Book of Changes.

Reference

 * Robinet, Isabelle. Taoism: Growth of a Religion (Stanford: Stanford University Press, 1997 [original French 1992]) page 103. ISBN 0-8047-2839-9.