How it Started
After Muhhamad died no one knew what to do about who would take control and what would happen. Two major clans of Islam people fought over whether a friend of Muhhamad should take over or if a relative of him should . . .
Sunni
The Sunni accepted that Abu Bakr became the first, "caliph" or successor to Muhhamad. Abu Bakr was a good friend of Muhhamad's. So, the Sunni are in favor of a friend to take over rather then a relative.
Shia
The Shia believed that Ali should have been Muhhamad's successor. They thought that a blood related person should take over in Muhhamad's place. Still to this day the two different groups of Muslims kill each other over who should be the successor.