Final answer:
During the Ming dynasty, Daoist tradition underwent institutionalization, further integration with Confucianism, and saw the rise of lay-led religious movements.
Step-by-step explanation:
The transformations experienced by the Daoist tradition during the Ming dynasty (1368-1644) are noteworthy. Institutionalization of monastic Daoism advanced during this time, as evidenced by the extensive compilation and standardization of Daoist texts and the growth of the monastic community. Additionally, there was an integration of Daoism with Confucianism, borrowing themes and terminology from one another to complement each tradition. This integration is particularly clear in the Ming era's revival of Confucian-based rituals and learning, which were seen as complementary rather than competing with Daoist beliefs. Finally, there was the rise of lay-led religious movements that signaled a diversification in religious practice beyond strictly organized institutions. However, the option of the embrace of secular, non-religious practices does not directly describe a transformation of the Daoist tradition itself but reflects the broader societal trend during the Ming period where there was a focus on traditional practices and a shedding of Mongol influence.