Was Taoism the belief that people were bad by nature and needed to be controlled through strict laws and punishment?

No, that belief aligns more closely with Legalism, which views people as needing strict laws and punishment to maintain order. Taoism, on the other hand, emphasizes harmony with the Tao (the Way) and the natural order of the universe. It promotes simplicity, compassion, and spontaneity, suggesting that people are inherently good and should follow their natural instincts rather than be controlled by strict laws.