The following explanation of Sufism are taken from the introduction to the book Principles of Sufism by Seyedeh Dr. Nahid Angha.
In order to understand Sufism and its origin we must briefly touch on the elements of studies that have been undertaken in the hope of understanding Sufism, and so examine the accuracy of the conclusions that scholars have drawn. To do so, the reader should keep in mind a few important caveats while studying the information that has been collected concerning Sufism. Sometimes the lack of truly thorough research, or the difficulties inherent in translating from one language to another, have led to confusion instead of enlightenment. As a result, Sufism is often only half understood, with that understanding further clouded by interpretations and the biases of commentators. These limitations have made tracing the road to Sufism's origin difficult, even for accomplished scholars. Even should the scholar choose his sources very carefully, the barrier of language yet remains, an important factor hindering the passage of truth.
There have been many debates concerning the origin of Sufism and how this school of inner knowledge was established. In seeking the spiritual and intellectual ancestry of Sufism, some have looked toward Greek philosophy in general and Platonism especially, some to the Hermetic Christianity of the Gnostics of the late Roman Empire, and others to Buddhism or Yogism. But Sufism, as it has been practiced since its birth, is quite a different school of belief, practice, and goal than any of these preexisting ways of thinking. Even though Sufism as the school of spiritual knowledge based on self cognition as the door toward understanding the realities of Being is a school open to all humanity, but it was born out of Islam and is the heir to the treasures of knowledge from the sacred heart of the Prophet Mohammed, and has practiced its way accordingly. The actual birth of Sufism as a way of thought and practice is therefore subsequent to the advent of Islam.
The history of the origin of Sufism records that during the lifetime of the Prophet Mohammed, fifteen centuries ago, there was a group of pious individuals from different nations who, guided by the Laws of Islam, sought for the direct experience of the Divine. Companions of the Prophet, they were people of principles practicing certain disciplines and meditations for the sake of purification, the realization of Divine love, and the understanding of reality. They were the Lovers of God who sought union with Him through losing the limited self in His Divinity (fana), and remaining alive in that Reality (bagha).
These individuals met on the platform, or suffe, of the mosque where Prophet Mohammed used to pray in Medina, Arabia. They would meet there almost everyday to discuss the ways to inner knowledge, the truths of revelation, and the meanings of the verses of the Koran. Thus the platform of that mosque in Medina became the first gathering place of one of the most influential groups in the history of mankind's spiritual civilization. They were called ahle suffe, the People of the Platform.
These individuals cultivated the seed of a school of spiritual practice based on knowledge of the self, and thus free of the trappings of tradition and superstition, a knowledge of the inner heart apart from the customary beliefs of their contemporary society as well as those of future civilizations. It is from this group that all the schools of Sufism that have ever existed owe their origin, for by pursuing the path of unsullied inner knowledge they were the founders of Sufism, and the binding link between its subsequent developments.
Among the most famous were: Salman Farsi, Ammar Yasser, Balla'al, and Abdullah Masoud; some historians have added Oveyse Gharani to this list as well. Avoiding proselytizing among the multitude, their gatherings were held in private, open only to true seekers of reality. Instead of preaching in public, these pious individuals were searchers for truth, not performers of rhetoric.
After the Prophet passed away, each of the people of suffe returned to his homeland to instruct students eager to follow upon the path of inner knowledge. There they became the great missionaries of Islam. History shows that within a century or two their style of self understanding and discipline were introduced by their students to nations as diverse and widely separated as Persia, India, Indonesia, Syria, Egypt, Mesopotamia, and North Africa. Their teachings were based on individual understanding and direct experience, not just on particular texts or rote learning. In this manner their fundamental teachings have been preserved in their style up to the present, instead of withering away into the empty formulas of scholasticism.
Through this process of diffusion, different schools and orders of Sufism gradually emerged from the single original group of suffe at Medina. Their practices differ from one another in emphasis and doctrine, but all legitimate Sufi schools trace their ultimate origins back to the original group of the Prophet's spiritual disciples.
The pursuit of truth is the quest for a particular goal, a quest pursued no matter how difficult the path -- and for the most important truths, the way may be long and arduous indeed. Tasawouf, or Sufism, is the esoteric school of Islam, founded on the pursuit of spiritual truth as a definite goal to attain: the truth of understanding reality as it truly is, as knowledge, and so achieving ma'arefat. In Tasawouf when we speak of understanding or cognition we refer to that perfect self-understanding that leads to the understanding of the Divine. This very logical principle is based on a typically succinct saying of Prophet Mohammed: "Whoever knows oneself, knows one's Lord." The origins of Tasawouf can be traced to the heart of Islam in the time of the Prophet, whose teachings attracted a group of scholars who came to be called "ahle suffe", the People of Suffe, from their practice of sitting at the platform of the mosque of the Prophet in Medina. There they engaged in discussions concerning the reality of Being, and in search of the inner path they devoted themselves to spiritual purification and meditation.
The ahle suffe believed that it was the unique human right and privilege to be able to find the way towards understanding the reality of the Divine. As the cognitive tools of ordinary mental logic are limited in their ability to comprehend such a great and all- embracing subject, disputation and all discussions based on language alone cannot open any door to understanding such reality. Instead, such a path of understanding necessitates spiritual striving, the understanding and the knowledge of the heart, in its quest to realize the existence of the Divine. Such an approach separates Sufis from philosophers, and indeed from any other group of scholars whose knowledge is founded upon traditions, words, assumptions, and the imagination instead of the actual and direct understanding of all that exists. Thus the path of Sufis, of cognizant Moslems, was separate from that of the traditional understanding. They became the people of the tarigh, or the way; their particular goal was to understand and introduce the esoteric aspect of Islam, as opposed to the exoteric public elements of this universal religion.
The principles of Sufism are all based upon the rules and teachings of the Koran and the instructions of the Prophet. To a Sufi there is no gulf of separation between all of Being, the Creator, and His creations. That the multitude cannot perceive this fundamental unity is the result of the impurity of nafs and the limitations of the material and physical tools that mankind possesses. If man were free from the limitations of matter, then he would surely witness this immense and eternal unity of Being. But there is a chance for mankind to ascend to such a level of understanding, a pathway that can be followed through purification and meditation to the realization of its achievement. When one's heart is purified, the manifestations of the Divine is reflected in the mirror of the heart. Only then may man ascend from the level of his animal nature to the level of the true human being.
Since all the principles that underlie the instructions of Sufis are based on the Koran, it is impossible to relate Sufism to any religion outside of Islam. Yet the search for true understanding and abstract knowledge of reality is a universal quest. As long as humanity endures, so too will the search for such understanding continue. History shows us that every nation and religion has its own way of expressing the universal spiritual quest.