
This question has a really extensive answer because it involves a lot of insight first and then the study of the origins of religions, the study of humanity and its tendencies, the study of human nature and many other factors that affect the tangibility of the human mind. Most important of all we need to understand first why we have a belief system and then we can go on to discuss why people have different belief systems.
Before we start we have to go back tracing history and study the time periods when religions surged and what factors could have affected this. We know for a fact that since the beginning of humanity, people have been curious because it is in human nature. People have always wanted to understand things, so since the beginning people have asked themselves questions about everything, the universe, earth, life, and so many other questions we have all asked ourselves during some point of our lives. This hasn't changed at all, the only difference is that thousands of years before, people had less technology and scientific as well as mathematic means to understand and answer many of these questions. As I said in my first blog entry, as years pass by, people are less religious and this is because each day we as humans gain more knowledge and understanding of tiny little things that in time sum up to form answers to those same questions we have been asking ourselves since the beginning of humanity, or should I say since Adam and Eve's time? well I don't really know. I have been raised as a Roman catholic so Adam and Eve would be the first people to have asked themselves these question. Well I can't really say that because I'm using two religious characters to defy the essence of religion itself.
As people couldn't understand the marvels of nature, they started believing in a supernatural power, something beyond that controlled everything. This was the beginning of religions. At first like in many Pre-Columbian civilizations and early European empires people believed in many gods, in a supernatural being that controlled something inexplicable to them. There was a god for the sun, a god for the rain, a god for the gods and many more. Any event that had no apparent explanation would be the foundation for a new god. As time went on and we learned and discovered more about the universe, life and nature; we got to answer many of those questions and that is how polytheism has been virtually narrowed down to monotheism, the belief of one single supernatural being or deity that controls everything, that created us among all that exists and that we are subject to its will. Most religions nowadays are monotheistic and the reason for believing in a god is that we still haven't answered every question, we are still relatively ignorant as we don't understand life, we don't understand the immensity of the universe among many other things about the beginning of time and many other questions. We apply the same basic principle as before, if we don't understand all of those physical and mental inquiries there has to be a god that controls it and we are subject to it, that is the best explanation there is. This is the basic principle of most theistic religions, most other religions surge in order to find a better way of living, but the truth is that humans seek to unveil the ultimate truth within their religions. That is basically why religions exist.
Separate belief systems have derived from the three major

schools of religions, the Abrahamic religions, the Dharmic religions, and the Taoic religions. These three are the main roots for every religion, the abrahamic religions include Christianity, Judaism, Islam and are based on prophets like Abraham, Moses and more. Dharmic religions include Buddhism, Hinduism and many more and are more philosophical. Taoic religions are religions of the far east that include Taoism and confucianism. They involve the concept of Tao, "The Way".
People are mostly born in their religions, and that is mostly depending on the family, and the country's main religion. Most people born in India for example will be Hindu, Muslim or Buddhist. On the other hand people born in the Bolivia will probably be Christian. Most people don't really choose their religion that is what I mean. If you grow up in a Catholic environment your whole moral and chain of thought will be guided by the foundations of catholicism. Although there are people that while growing up feel uncomfortable with their religion, some decide to follow other religions or simply apply their own changes and modify their beliefs to what they think is more appropriate or right. All of this is of course personal and unique to each person.
Most religions accept the existence of the other religions, basically religions from the same school or branch have basically the same history but with some differences in them, the essential though is conserved. I read that for example the Baha'i see all religions as one, with the same ultimate goal. People grow up and their characters are formed by their history, each person believes in what they truly think is right. Sometimes this is totally narrow minded as they were taught it was just this one way since the beginning. At the end religions are just means to have internal peace and live without so much intrigue and accept that the truth is never to be revealed to us at least during our lifetime. Obviously its not this simple, religions are extremely complex and are based on subjectivity, none of us can prove that any religion actually exists as they say, religion is based on blind faith most times and if not total devotion to it, doubts are seen as negative ways to confront religion.

People with serious problems also tend towards religions or stronger belief systems, their suffering and problems drive them to reach out for something that will keep them together in most cases believing in god or holding a firm thought that there is something greater beyond our understanding is comforting and many people become religious this way. Depending on their problems they tend towards different religions the ones that address their issues with more focus or precision. A quick example, Buddhism addresses the issue of ending suffering and living in peace, while Christianity addresses the fact that you just need complete faith and whatever it is that troubles you is there for a reason, and you have to learn from it.
In Conclusion we can't really give a reason for the different religions and belief systems there are and why people believe in different ones. The best we can do is speculate why every time there are more derivatives of religions, and what is that bases people's mind to believe in something, what is it that drives people into believing in something they can't see, feel or really understand. And finally why have hundreds of religions been created if in reality the end of each is almost the same.