The division between Shia and Sunni dates back to the death of the Prophet Muhammad, and the question of who was to take over the leadership of the Muslim nation.
The word "Sunni" in Arabic comes from a word meaning "one who follows the traditions of the Prophet." Sunni Muslims agree with the position taken by many of the Prophet's companions at the time, 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 adviser, Abu Bakr, became the first Caliph of the Islamic nation.
On the other hand, some Muslims believe that leadership should have stayed within the Prophet's own family, among those specifically appointed by him, or among Imams appointed by God Himself.