During the Gupta dynasty (c. 3 20-500 CE) puranic religion developed and expanded, and the stories of the Puranas spread rapidly, eventually throughout the subcontinent, through the singers or reciters, and indeed composers, of the narratives. This expansion was accompanied by the development of brahmanical forms of worship, the Smarta or pauranika, based on those texts. With the decline of the Guptas, while this Smarta worship is well established, there occurs an increase of esoteric cults, many of which, or elements of which, become absorbed into brahmanical forms of worship.

The Shaiva Puranas, the most important of which are the Linga, and the Shiva Puranas, contain the usual puranic subjects of genealogies, the duties of different castes, Dharma Sastra material and astrology, as well as exclusively Shaiva elements such as the installing of lingas in temples, descriptions of the various forms of Lord Shiva, and the nature of Shiva, whose body is the cosmos, as transcendent and immanent. Apart from material on the formal worship of Shiva, Puranas such as the Linga also contain information on asceticism and yoga, particularly the yoga of the Pasupatas. The Puranas classify Shaivas into four groups, namely the Pasupata, Lakulisa, Shaiva and Kapalika, while Ramanuja in his commentary on the Brahma-Sutra lists the Shaivas, Pasupatas, Kapalins and Kalamukhas. All these groups are generally outside the Vedic or puranic system. Indeed all the Puranas were composed within the sphere of Vedic or Smarta orthodoxy and texts such as the Kurma-Purana condemn the Pasupata system, favouring instead the authority of the Satarudriya and a late Upanisad containing Shaiva material, the Atharvaiiras Upanisad. Although the Puranas are pervaded by non-orthodox Shaiva material, they nevertheless distance themselves from these non-orthodox or tantric systems which posed a threat to Vedic purity and dharma.

A Brahman householder who worshipped Shiva by performing a puranic puja, making offerings by using Vedic mantras to orthodox forms of Shiva, was not an initiate into a specific Shaiva sect, but worshipped Shiva within the general context of Vedic domestic rites and Smarta adherence to varnasrama-dharma. In his commentary on the Brahma Sutra Sankara refers to Maheshwaras who worship Shiva, probably meaning those who follow the pauranika form of worship. As per some scholars, such a brahmanical Shaiva within the Smarta domain, a Maheshwara, can be contrasted with an initiate, technically known as a Shaiva, who has undergone an initiation (diksha) and who follows the teachings of Shiva (Shivasasana) contained in Shaiva scriptures (sastra). While the Shaiva initiate hoped for liberation (moksa), the Shaiva householder or Maheshwara would at death be taken to Shiva`s heaven (Shiva loka) at the top of the world egg, where vaikuntha would be for the puranic Vaishnava.

The Shaiva initiates (as opposed to the lay, pauranika devotees) can be further classified within a more general distinction, between on the one hand the `Outer Path` (ati marga) and on the other the `Path of Mantras` (mantra marga). These are two main branches described in Shaiva texts, the Agamas or Tantras. The former, open to ascetics only, is a path exclusively for the purpose of salvation from samsara, while the latter, open to ascetics and householders, is a path which leads to eventual salvation, but also to the attainment of supernatural or magical powers (siddhi) and pleasure (bhoga) in higher worlds along the way. The path of the ati marga might also be rendered as the `higher path` - the path which has transcended the orthodox system of four stages of life (asrama), going even higher than the orthodox stage of renunciation according to the Atimargins.