The close association between dragons, colors, cardinal directions, elements, and even “emotions” indicates that Dragon “martial art styles”, at their inceptions, were probably for divination and fortune-telling, and their ritual dances, maintained in the traditional Dragon dances of today, were to conjure rain and mitigate fertility and harvest crises. The various dragon schools (black, silver, jade, ruby, etc.) would have performed dragon dances differently, and training to perform these dances would have resulted in the development of different physical abilities. So over time you’d have a diverse map of “clubs” where dragon students had certain abilities inculcated for the purpose of doing dragon dances. It’s not a stretch to imagine that these abilities would have been codified as “martial art systems,” with weapon forms that were older and had less resemblance to the animals themselves, and their proponents would have claimed to have such and such superior techniques over other schools. You could imagine them doing these forms on a fight line when competing at festivals, or perhaps they vied for contracts to give them rights to perform the festivals, which would 1) bring lots of income and 2) demonstrate magical superiority over other schools, provided the rain did come.
Shaolin appears to have been like a university system which combined the various schools (dragon, snake, etc.) under one roof so that 1) a student could learn the basic dances (“forms”) and then branch out and specialize later on at the various martial clubs (and this might have been the result of the local totemic clans breaking down after the creation of trade roads that incentivized movements toward the coast), and 2) (later on) patriots of the secret societies could coordinate attacks and combine forces, often against the government.
Source: The Shaolin Grandmasters’ Text, 2004.