The First Council was intended to make sure that all the teachings of the Buddha were kept intact and wouldn’t be lost. This happened after the death of the Buddha. Its main function was gathering all the teachings together and keeping each category of teaching (the Sutras, Vinaya, and Abhidharma) very clear and very well defined. Each sutra was kept complete and each chapter was kept clearly separate so that nothing would get mixed up or altered. In this way, the First Council established what the teaching of the Buddha really were and under which form it had been presented.
Later, the Second Council (sometimes called the intermediate council) took place 110 years after the Buddha had passed away (in the year 376 B.C.E.).
At that time there had been a greater number of new monks joining the sangha and some of them started thinking that some of the rules of discipline laid out by the Buddha were too strict. They also tried to establish ten new rules. These new monks tried to say that these new rules were actually made up by the Buddha.
Threfore, this Second Council had to be convened to make sure that the teachings wouldn’t become modified because of these people’s initiative.
One example of what that these new monks wanted to introduce was: If you had done some negative action, then it would be sufficient to fold your hands to the heart and to say something like “hulu, hulu” and then it would be purified and you wouldn’t need to do anything else.
Another rule they wanted to introduce was that if a monk had done something wrong, that went against the discipline of the monastery, then all he would need to say was, “I’m going to confess this.” Another monk would say, “Oh, that’s very good” and that would be enough and everything would be purified. (Other such new rules included begging for gold and taking intoxicants under the pretense that it is for medical purposes).
So these monks were trying to introduce a lot of simplifications and easy ways of doing things.
During this time, there was a very exceptional being, an arhat called Yashah. He saw this happening and realized that if nothing was done, the teachings of the Buddha would be altered and perverted. To prevent this from happening, he convened this Second Council with several other famous arhats.
Where did the trouble originate about these new monks trying to create new rules? At the time in India, there were six main cities, and the group of monks who wanted to start these new rules all came from Vaishali.
The arhat Yashah invited seven hundred arhats to meet for the council in Vaishali. He led the meeting by saying, “Well, now we have these ten new items that these monks are trying to introduce. The questions we should ask ourselves are whether these ten items can be found in the Sutras or in the Vinaya or in the Abhidharma.” He asked all of the arhats that were present where these could be found and all of the arhats replied that they couldn’t be found in any of these works.
Then Yashah asked, “Are these items in contradiction with the teachings of the Buddha; of the Sutras, the Vinaya, and the Abhidharma?” And the conclusion was that they were in contradiction with the works of the Buddha.
As a result, they decided that these rules should be rejected because they didn’t agree with what the Buddha had taught and certainly were not part of the teaching of the Buddha.
It was decided that this attempt to introduce new rules should be stopped and that these ten rules should be eliminated. Then the council took advantage of this positive situation to define once again very clearly what the teachings of the Buddha were so that there was a new, complete reading of the whole of the sutras, the whole of the Vinaya, and the whole of the Abhidharma to make sure that these teachings were the only ones to be recognized as the Buddha’s teaching.
After the Second Council, little by little the different communities of monks started to split up into different groups. So at first, there were four different groups of shravakas (Hinayana practitioners, lit. 'listerners of the dharma') and then this gradually evolved into eighteen different categories of shravakas, almost like different sects.
Each group started feeling that they really held the true teaching of the Buddha and their view was the right one and all the other groups were wrong. This, of course, generated a lot of arguments and debates creating a new danger that the teachings of the Buddha might be altered and degraded. So at this time a Third Council was convened.