Astrology is based on the cosmos, meaning it is determined by the location and movement of planets and stars, the Celestial. Before Taoism was formed as a religion, “the ancients,” as Lao Zi called them, valued living in harmony with nature as an expression of the Tao. These ancients believed that the patterns of the Celestial (the activity of the stars and planets of the heavens) had an impact on the patterns of the terrestrial (the cycles of time here on earth— seasons, months, days— and fortunes).
The twelve animal signs were identified by these ancients who looked deeply at the patterns of nature. They believed these particular animals represented heavenly energies that came to be embodied in physical form here on earth.
The partial exception to this is the dragon, which could be seen as part terrestrial and part celestial. Chinese culture traditionally believes dragons exist energetically within all the elements that surround us, for example in the sky and water, and they also energetically reside in Celestial realms. And on the terrestrial side, they take physical form here on earth, for example, the lizard and alligator.
Because they believed the heavenly and earthly dimensions mirror each other, and the Celestial realm (the stars and planets) has an effect on the terrestrial realm (time, months, days, fortunes) the animal signs and elements could be used as metaphors to understand the rhythms of nature and to guide people and society in following and even predicting the patterns of nature.
Taoists continue to carry on the wisdom of the ancients, those who Lao Tzu based his teachings on in the Tao De Jing, whose deep understandings form the basis of Taoist philosophy. One of the ways Taoists do this is by using Chinese Astrology to guide their lives in harmony with the Tao by observing the Celestial patterns unfolding, influencing, and expressing themselves through the rhythms of nature.