I've been wondering about this since the Grand Selection arc on SOTR (Sovereign of the Three Realms). The MC is someone that hasn't joined a Sect and is participating in the Grand Selection to find cultivators with the most potential. Throughout that entire arc, he's referred to as a "secular" cultivator because he isn't affiliated to any of the four major sects in the story so far. The use of the word "secular" isn't a one-off thing either. It's used to refer to the MC's independent status by everyone in the story. That's a specific word to use, especially considering 'independent' or 'unaffiliated' would be the more expected word choice. In most stories, we never really find out anything about how different sects function beyond cultivation. Different sects focus on specific aspects of martial arts, and they do have an overarching philosophy relating to their individual paths. Does that mean that a sect is essentially a religious organization? 'Nine Cauldrons' is another story where you can get a more nuanced understanding behind the various sects. The MC in that story respects the teachings and beliefs of other sects and Masters but is unwilling to let them corrupt his own understanding of Martial Dao. My interpretation is that they function as branches from the overarching philosophy/religion of Martial Dao. The Ancestor/Founder finds something specific in the vague, nebulous Martial Dao and creates a religious organization based on that. Sort of like the various denominations of Christianity.