How did Caliph Mu'awiyah's act of making the caliphate hereditary during the Ummayad dynasty ultimately lead to the splitting of Islam into two groups

Caliph Muawiyah belonged to that family / sub-tribe, which lost many of its members in battle with the prophet Muhammad and Ali. Their Meccane relatives were the most prominent pagans who converted to Islam at the last moment to save their lives.

They had a deep hatred for anything and everything, which was related to Mohammed and Ali.

Muawiyah chose the chosen system of the Caliphate in the nominated Kingdom system.

They introduced ancient laws based on the Hammurabi code such as Sharia.

They left out all the Islamic religious scholars in power.

They systematically removed all the signs and memories of Muhammad, including his biography.

Family members of Mohammed and Ali were executed to erase Mohammed's bloodline. This was done to eliminate any possible challenge to his supremacy.

He spread many fabricated stories about Mohammed's life and personal affairs, which became so widespread that many were included in hadiths later.

They reintroduced many ancient pagan Arab practices into Islam.

It was only after the installation of the Abbassid Caliphate (some 200 years after Mohammed's death) that Mohammed's authorized biography and his sayings (Haddiths) were able to compile again, but at the time it was difficult to overcome the rumors of the facts.

Explanation:

This vengeful hatred of the Mohammed family resulted in Muslim society being divided into loyalty from the Mohammed family (Shiites - followers of Ali) and others (Sunnis).