In the late 1970s, Ray Sherwin and Peter Carroll, two young British occultists with a strong interest in ritual magic, began to publish a magazine called The New Equinox. Both were connected with a burgeoning occult scene developing around a metaphysical bookstore in London's East End called The Phoenix. Both men quickly became dissatisfied with the state of the Magical Arts and the deficiencies they saw in the available occult groups. So in 1978 they published a small announcement in their magazine proclaiming the creation of a new kind of magical order, one based on a hierarchy of magical ability rather than invitation, a magical meritocracy. They described it as a "spiritual heir" to the Zos Kia Cultus and a "fusion of Thelemic Magick, Tantra, The Sorceries of Zos and Tao".

Carroll and Sherwin began to publish private monographs detailing their system of magical practice, some of which had been articles in The New Equinox, others intended as instruction to members of their order. The new style of magic they introduced, focusing on practical skills as opposed to metaphysical systems, became known as chaos magic. In the 1980s they began to attract a following in England, Germany, and Austria, including influential occult writers and practitioners.