How and where did this particular branch develop?

The division between Shiites and Sunni dates back to the death of the Prophet Muhammad, and the question of who was to become leader of the Muslim nation. Sunni Muslims believe that the new leader should be elected from among those capable of the job. This is what was done, and the Prophet Muhammad's close friend and advisor, Abu Bakr, became the first Caliph of the Islamic nation. The Shiite Muslims believe that leadership should have passed directly to his cousin/son-in-law, Ali. Throughout time, Shiite Muslims have not recognized the authority of elected Muslim leaders, instead following a line of Imams which they believe have been appointed by the Prophet Muhammad or God Himself.