Zao is the official state religion practiced in the Empire of Kaidan, utilizing recognized orders of monastic priests of recognized temples and monastaries with the decree of maintaining the empire, one's place in the caste system, and observances through out the months and years, performing appropriate rites, chants and prayers
Under the Zao religion, the universe is a great Wheel of Life where six different planes of being exist, all citizens reside in one of them.
Wheel of Life
The Wheel of Life construct is an endless cycle of reincarnations that all spirit travels on between life and death. The six realms of the Wheel of Life include: heaven, asuras (realm of jealousy), human realm, animal realm, the hungry ghost realm, and Hell. Each of these realms are defined by certain sins or character flaws that take you there in death.
Rather than being different planes of existence (as in eastern thought) the social caste system of Kaidan: emperor/nobility, samurai, farmers and priests, and the merchant caste are each defined by one of the realms of the Wheel of Life. Thus the construct is the empire, and all realms of the construct exist in Kaidan, in the form of the caste system. On which realm/caste you belong is determined by your deeds in a previous life.
Heaven, the realm of pride, complacency and intoxication is the noble caste, thus those who have the precepts of pride, complacency and intoxication in this life will grant you into the Noble Caste in your next life. The Imperial Court and the Provincial Daimyos (ruling clans) are both the nobility caste and the heaven realm. Note most of the nobility of Kaidan are undead, its not the Heaven you're thinking of...
Asuras, the realm of jealousy, resentment and ambition, characterized by endless strife and war to achieve success. This is the samurai caste, from the Shogun to the lowest retainer serving a lord, and even the honorless ronin.
Human realm is characterized by desire, freedom of choice and dissatisfaction and comprises the bulk of Kaidan society, which is the commoners caste - farmers, fishermen, artisans and priests.
Hungry Ghost realm is defined by greed, insatiable cravings and addictions exists as the Merchant Caste, which also includes: ninja, entertainers, yakuza and prostitutes.
Falling outside the caste system, yet still a part of the great Wheel of Life are...
Animal realm is characterized by ignorance and domination of instinctual needs (sex, food, territory...) are barbarians and Animals of the wilderness. The animal barbarians of Kaidan are shape-changers, called the Yokai. They actually have the largest territories not controlled by the emperor, but are not a cohesive territory, rather any extensive tracts of wilderness throughout the empire - mountain ranges, woodland tracts, inaccessable coasts, etc.
Hell is the lowest realm of the wheel, defined by rage, torment and despair, this is the Underworld, the realms of the Oni or demon people. This is the only metaphysical, other planar existence in the religion of Zao and life in Kaidan. Theologians could consider it the Ethereal Plane, as it coexists with Kaidan, but just slight out of sync breachable only through dark sorcery.
The Thousand Heresies
There are innumerable heretical beliefs on how to take advantage of the Wheel of Life construct by various factions in the empire. Though all practice the state religion in public, many practice a private heretical belief. The most notable ones are found below:
The Heresy of the Imperial Court
Defying the true path of Zao, the Imperial Court follows a heretical practice. When a living member of the noble caste, proves loyal to the court and demonstrably skilled at appointed tasks, they are prepared and killed in a rite that denotes greater Yurei status. Becoming undead, one can nolonger reincarnate and remains permanently a member of the noble caste. It is a means of escaping the Wheel to hold power.
The Oni Agenda
Because the Hell realm resides separate from the remainder of Kaidan by a planar boundry, a great antipathy exists between the Oni demons and the rest of humanity. They seek access to the rest of Kaidan so they can bring war and burn the land to ashes as it should be.
The Oni have discovered a secret of the Wheel of Life. To maintain stability, the Human realm of the Commoner's Caste must always be the most populated of all the realms. If balance is altered the planar boundries will weaken between realms and chaos will result. Oni have armies on constant alert awaiting for the moment the boundries drop to invade.
On Antoku 452 (over 500 years ago) a peasant war was insurrected by Oni agents, followed by a devastating plague caused the deaths of nearly 2 million members of the Commoner's Caste, which severely weakened the boundry. Thousands of Oni, demon spirits and bakemono escaped the Hell realm into the rest of Kaidan. Only through the intervention by Imperial and Minamoto resources could relief be found which strengthened the boundries once again.
The Boddhisattva Heresy
An enlightened monk from a place called the "Pure Lands" arrived in Kaidan (?) at the court of the Daimyo Minamoto no Yoshitsune in Genjisama and began teaching the Path to Enlightenment, a heretical belief that stated if one could remove the emotional and egotical bonds to material things, one can become enlightened, and achieve the perfect state of Nirvana. Nirvana existed outside the Wheel of Life and thus was the only true escape from it. Finding the path is an act of good, those following it could escape Kaidan itself.
Truth of this path is realized by the Imperial Court considering it the most blasphemous of heretical beliefs. Those who follow it are enemies of the state, who shall be hunted down and brought to justice. Only the fact that Boddhisatva mages are the most powerful spell casters in Kaidan, prevents this heresy's doom.
"Nirvana is something that should be kept in a box and hidden away, for it is the pin pulled that will end the construct of Kaidan." spoken by the Taira no Kiyomori to the imperial court on its founding day, 1000 years ago.
Every institution of Kaidan society from ronin samurai houses to the Yakuza crime families are each believed to follow some unique heretical belief as a faith of the Wheel of Life, and how that faction can best take advantage of that. It is this reason that there is believed to be a Thousand Heresies in existence and the empire does its best to identify and neutralize all threats to the Imperial doctrine.